Disqus - Latest Comments for ChadCastle

Re: What if There is a Fire?

ChadCastle — Thu, 03 Sep 2009 14:58:39 -0000

Carl,
I'm not sure that throwing out a risk tolerance questionnaire altogether is the best approach, although I do agree that they have some HUGE shortcomings.

I recall back to when the risk questionnaire was not necessarily "best practices." Early in my career I remeber asking a prospective client whether or not they were an "aggressive" or "conservative" investor. The prospect answered, "Aggressive, of course." Much to my surprise, after employing the use of the worthless questionnaire, I learned that his version of "aggressive" meant 5 year CDs instead of 90 day CDs. So, at least in this once instance, the questionnaire did prove to be helpful.

I think RobBennett may be right in that a client's answers to the questions tend to ebb and flow with whatever the market has done in recent history. This makes any static questionnaire become less effective over time. So then, the question of the day is what is the best measure or guide to determine a clients true risk tolerance?

Re: Fine Tuning Risk

ChadCastle — Wed, 02 Sep 2009 10:52:59 -0000

Carl, This is good stuff. You are very correct in that we have tended to always think that measuring standard deviation was our way of trying to control risk. Well, last year, and in certain years past, that hasn't worked so well, especially for those of us in the MPT camp. Mike's post below is more to the point in that client's definition of risk is to not lose money. I know that you have even started to rethink MPT and what it does/does not mean when planning someones financial future. I read an article not long ago in which the author was stating that negative standard deviation is what we all need to be focused on. I may agree with that but Mike may have said it best in that we may not even be measuring the right things. So arriving at some conclusion may become the easy part, if we can simply figure out what all the right questions are.
Best Regards,
Chad Castle

Re: Behavior Gap Round Up, 6.19.09

ChadCastle — Fri, 19 Jun 2009 11:33:50 -0000

Carl,
I love your comments today. They seem to really resonate with me this week. Thanks for having Roth on the program. He did a nice job.
Chad Castle
Castle Investor Coaching
Chad@ChadCastle.com
www.ChadCastle.com

Re: Behavior Gap Round Up, 4.17.2009

ChadCastle — Fri, 17 Apr 2009 14:40:42 -0000

Carl,
Nice shirts. I would prefer and adult XL, please.
Chad Castle

Re: Behavior Gap Round Up, 4.17.2009

ChadCastle — Fri, 17 Apr 2009 14:39:08 -0000

Carl,
Please sign me up for an Adult XL.
Thank you,
Chad Castle

Re: Process Versus Product

ChadCastle — Thu, 16 Apr 2009 10:42:12 -0000

Carl,
Thank you for this great post. I see the product vs. process work its way out every day in my office. It is interesting that the "product" part of the dicussion has become some oversold that when prospects come to my office they often ask early on in our initial meeting what "products" I have to offer and why or how my "products" are different from the competition.
Chad Castle