Do you consider yourself risk adverse with your money? Or are you a risk taker?
I never considered myself a huge risk taker, but after talking to some friends about investing, I find that I am a lot less risk adverse than they are! 
I think my risk tolerance is probably about right for my life stage though, according to a bunch of financial books/blogs that I've read.
pomegranate / 3809 posts
Yes and no. I was definitely a risk taker a few years back, but I think that was just sheer stupidity on my part. I was just shoveling money into the market and making blind investments. (Though it did turn out to be lucky and made me a pretty penny). But in my portfolio that has the majority of my investments, it is not high risk. My financial adviser and I both agreed that I should target steady growth rather than high risk for potentially higher returns.
wonderful pear / 26210 posts
I am probably more risk averse than the modeling tools would like me to be for my age.
grapefruit / 4731 posts
I'm totally risk adverse and conservative. My co-workers that I talk to a lot about money are way more riskier than me. Though I think they are too risky.
One co-worker that's very pushy about taking risk is taking out big debt to buy a small condo in a very rich area in the bay area because he thinks he can sell it in a few years and make a big profit but he's counting on not losing his job and his wife not loosing her job in that time or else they are a big troubles! Way too risky!
Though I guess we could stand a bit more risk in general.
coconut / 8430 posts
@looch: @snowjewelz: @T.H.O.U.: @Adira: @Raindrop: @blackbird: So interesting that all you ladies say you are more risk adverse than you "should be" (according to models). Anyone care to share rationale?
I guess I am pretty tolerant of risk due to a long time horizon. I won't retire for 30 years so I figure I have a long time for my investments to trend toward the average. We did recently rebalance our portfolio to explicitly include bonds for the first time though.
wonderful grape / 20453 posts
@sunny: I'll likely retire earlier than the model says I will, due to an inheritance, so I tend to be more conservative with my investments. It makes me uncomfortable to be risky with my money in general.
wonderful kiwi / 23653 posts
@sunny: I was raised to be a saver so I always choose the less risky portfolio! I guess I always hear the younger you are, the more risks you can take but I never feel comfortable with the "gamble". Also, I like to have a good amount of cash flow I can access in case of life's emergencies.
persimmon / 1431 posts
I always thought I was extremely risk adverse until I spoke with a few people. It looks like I'm frugal in spending but willing to take some risk with investments. I just think of investments as a really long term thing so I don't expect to see smithing for at least a decade. I'm frugal in spending because I just hate waste.
grapefruit / 4731 posts
@sunny: I think it's because I grew up very poor. There was always a chance we would lose the house and be on the streets. Actually not true we always had family near by we could crash at. I actually didn't understand how bad things could have been till I was in college and my parents really opened up to me about their money situation.
I think that affected me a lot to ALWAYS have money in the back and not completely tied up and also to make sure we can live off of one person's income at any given time. Plus since we were so poor I never saw any investments that bared fruit since my parents didn't make those.
DH on the other hand is super not into money and his dad is actually a financial adviser. I wouldn't be imposed to him taking some risk with our money but he's not interested so if anyone were to do any investing or risk taking it would be me but as I said from my past... not really going to happen.
wonderful pomelo / 30692 posts
@sunny: When I originally was investing in my 401(k), I just didn't know what I was doing, so I invested a ton in bonds! I've since redistributed my future investments, but still have a bunch in bonds!
grapefruit / 4731 posts
@Adira: A few years into working. I found a website that gave me suggestions of which funds to pick for my 401k by the company you work in. I ended up doing that and asking a few money savvy co-workers if that was okay and they all said yup. It's worked out well for me over the years. I'll tried to see if I can find that website but you can always change your fund allocation! Two times a year I always have to move my common stock fund (company match) to a more diverse options. Even though my company is doing well in the stock market right now it's very scary to have like over half my 401k in that one stock.
wonderful pomelo / 30692 posts
@Raindrop: If you find that website, I would love to see it!! My portfolio is pretty diversified, but I definitely have more in bonds than I'm "supposed" to for my age. Although that worked out really well for me a couple years ago when the market went to crap!!
eggplant / 11824 posts
I'm pretty comfortable with risk and have a fairly aggressively risky portfolio for my 401k, but I also have other retirement vehicles so I feel ok with take more risk in that one area. I'm also only 33 so I have time to be risky now; my answer will likely be different in 10 years.
wonderful pear / 26210 posts
@sunny: Frankly and simply, it's because of the decline in the market in 2007 and 2008 and the ongoing aftermath.
Enron was also a serious eye opener for me.
coconut / 8430 posts
@blackbird: Awesome that you'll retire early! I have my own hopes about retiring early too.
@snowjewelz: I'm a saver too, but I never thought about whether or not that has any bearing on my risk tolerance. I think for me, it doesn't.
@Pumpkin Pie: I think our attitudes are very similar!
@Raindrop: Thank you for sharing. Definitely a lot of my own attitudes towards money are shaped by my parents. My dad was really into investing so I think that's how I got into it. I think he could stand to be a little more conservative given his age though! 
Was the website a forum or was it an automated tool? If it was a forum, it might be Bogleheads. The people there are super knowledgeable and will give customized advice if you ask.
@Adira: Yes, bonds are supposed to "smooth out" the volatility. I held none during the crash (and subsequent recovery) so I both shared in the wild swings in both directions.
@yoursilverlining: Sounds exactly like me. I figure I have a long time before I need these funds. I'm actually more conservative with my LO's 529 funds since she'll need those sooner.
@looch: Enron is a great reminder of why we all shouldn't invest our entire 401ks in our company! Such a tragedy for those employees to lose their jobs, healthcare, retirement and probably home values all in 1 fell swoop.
wonderful kiwi / 23653 posts
@sunny: I didn't even like putting money into a CD for a long time! I only recently put our nest egg into a low risk porfolio. I don't know why I rather my $ sit in the bank and collect almost no interest!
apricot / 422 posts
I am risk adverse and DH is much more...comfortable.. with risk. It makes a good balance at this point, I think!
coconut / 8430 posts
@snowjewelz: You can always create a CD ladder if you're uncomfortable with locking all your money away for such a long time! Plus, penalties are generally forfeiting a certain amount of interest. Unless you pull the money out immediately, you won't lose any principal!
grapefruit / 4731 posts
@snowjewelz: Are you saving for anything? We are saving for another house since we live in a condo currently so yeah we have a quite a bit of money just sitting in a high yield savings accounts and a universal life insurance policy (this is my husbands and he handles savings through this) .
Do you have any debt? We actually do overpay our car loan and mortgage when we get bonuses. If we weren't saving for another house we would totally try to pay off these debts so we could be debt free.
wonderful kiwi / 23653 posts
@sunny: Well my finance guy finally convinced me to now put the majority of our savings into a low risk investment portfolio and after I triple check that most of that money is still liquid and can be withdrawn if needed!
@Raindrop: The funny thing is we're not! I guess w/ baby on the way, and always trying to think for those rainy days, I always just want more than I need in the bank account. We do have car, mortgage & student loans debts still!
grapefruit / 4731 posts
@snowjewelz: I'm all about the rainy day! Haha. Actually our condo isn't super small so we could technically live in it forever, we would just "like" a single family house some day.
We definitely worry about one (or both) of us loosing our jobs or something bad happening. It's funny we think of our savings as a "how long will this last us if we both lost our jobs and couldn't find other jobs" value.
wonderful kiwi / 23653 posts
@Raindrop: Yesss me too! I feel like the 3 months salary thing for emergency is not enough! My goal is really to never touch this nest egg (we dipped into it for sure when we bought a house). It's exciting that you're saving for a house!!
coconut / 8430 posts
@Raindrop: @snowjewelz: I totally agree that I need more than 3 months to feel comfortable. It has taken us a long time to build up our emergency fund to a place where I'm happy with it. Definitely helps me sleep at night and not worry about what the market is doing.
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