I recently wrote about one of the greatest dangers for retirees without a well-diversified portfolio. It relates to the world’s most misunderstood villain – inflation.

Consider reading these articles before you move on (spoiler – inflation isn’t the real villain after all):

Allowing your savings to be overtaken by inflation is not the only danger though. I am outlining 3 dangers below to help you be proactive and turn them into opportunities.

Half of Americans are fearful of running out of money. Interestingly, that is more than double the number of Americans who are afraid of dying.

So, how do you avoid outliving your money? It’s not a big secret. I’ve already shared how to have money at 100 years old HERE. Overall, it really boils down to investing in assets that beat inflation and finding your unique “sustainable withdrawal rate.” What is that rate? It is how much you can take out of your portfolio safely each year. In my article When Can You Retire, I give you the formula to calculate your sustainable withdrawal rate.

The next danger is being too conservative or too aggressive. Why is being too conservative a risk? Because – FOMO. You might see friends making more money in the market, and it WILL irritate you. You then try to bump up your equity exposure to “catch up” while the market is already high. It turns into a psychological nightmare for a financial advisor. If you are too aggressive, you might make The Big Mistake, which is becoming panicked during volatility and selling your assets at a low. This mistake happens all too often. How do I know?

Look at the orange bar in the chart below from J.P Morgan. “Average Investors” are prone to making investment mistakes like chasing returns and running away from volatility. As a result, they barely beat inflation.


The opportunity here is to find the risk/reward balance that is right for YOU! In the chart above, someone with a simple 60% equities/40% bond portfolio could more than double the average investor just by staying invested and not reacting! So, my point is, find the asset allocation most appropriate for you as a unique individual.

The economic future is always uncertain. Negative headlines aren’t new. They’re the same stories being recycled generation after generation.

Our great country has experienced amazing successes as well as our fair share of hardships. Yet, we have always overcome. So has the stock market.

But wait, Jessica! This time it’s different!! The country is far worse off than before… surely the stock market will crash and never recover when tragedy X happens!

  •  Remember when inflation in 1980 was a crippling 15%? Market recovered.
  •  Remember in 1988 when everyone thought Japan was going to take over the world? Oh, forgot about that? That’s because the market recovered.
  •  The 9/11 tragedy. Do you remember how devastating and fear-inducing that was? Market recovered.
  •  Global economic meltdown spurred by the mortgage crisis in 2008? Market recovered.
  •  Ebola, SARS, political scandals, impeachments, wars, Brexit, trade wars, Democrat control, Republican control, good presidents, bad presidents, even COVID… Up the market goes.

But why does the market continue to grow despite these fear-inducing events??

Because the stock market’s performance is based on companies making great products and services and earning profit! 

Can Apple sell headphones during a pandemic? Yes. Can Walmart sell produce when Democrats lead the Senate? Yes. Can Lowe’s sell lawn equipment with a Republican president? You betcha.

Tactical/Adaptive Asset Management allows investors to pick and choose exactly what kind of companies they should invest in during different market events.  Having a responsible tactical investment manager can help poise your portfolio for success in different market and economic environments.


I hope you are encouraged that those dangers in the financial world, whether personal, national or global, can be turned into opportunities. Talk to your advisor about how these dangers may affect you and what you can do now to be prepared.