The Siena Investor - Winter 2011

How to Know When You Have Enough  How do you know when you have enough? It’s a different answer for everyone, but not knowing it can put your investments in jeopardy.

Unless one inherits wealth, the most common way to amass significant wealth is by taking lots of risk. Being a risk taker who has known success can give you confidence in your ability to take risk. That confidence often creates the willingness to take risks. In addition, your wealth gives you the ability to take risk.

However, the ability and willingness to take risk are only two of the three criteria for an investment policy. There is a third (often overlooked) criterion — the need to take risk. A great irony is that the very people with the most ability and willingness to take risk have the least need to take it.