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How to be a Happy Investor 😊

Updated: Apr 9

By: Andrew J. Willms

President and CEO of The Milwaukee Company


When it comes to investing, I firmly believe that persistence is critical to investment success. By comparison, chasing the next great thing is a recipe for failure over the long term.


Sensible, rules-based, and thoroughly backtested investment strategies can provide the confidence needed to stay the course when things do not go as planned in the short run. Of course, no single strategy can generate positive returns under all market conditions for all time periods. As a result, it is critical for investors to structure their portfolios and to manage their investments in a manner that they can feel good about, even when times get tough.


Therefore, happy investors:


1. Know the returns needed to achieve their financial objectives.


2. Understand how much fluctuation in the value of their investments they can endure over the course of a year before they begin to lose sleep at night.


3. Recognize how low the value of their portfolio can fall before they panic.


4. Adopt an investment strategy that is consistent with points 1 – 3.


The first item listed above relates to your investment objective. Points 2 and 3 relate to risk tolerance. Both depend on a number of factors, including the extent of your investment knowledge and experience; how much time you have to invest; your other financial resources; and your willingness to suffer losses in the short run in an effort to reap greater returns over long periods.


Accurately assessing your investment objectives and correctly gauging your risk tolerance can be tricky. Risk questionnaires can help clarify your financial needs and expectations, but it’s important to use one that’s well-suited for you.


Like all things in life, not all questionnaires are created equal. The Milwaukee Company has recently posted its new and improved Investment Objective and Risk Tolerance quizzes HERE. Each quiz takes less than 5 minutes to complete.


These quizzes can give you valuable insights on the type of investments and portfolio strategies that would be well-suited to your personality and goals. But it’s important to confirm the accuracy of their results with a qualified financial advisor who knows your personal circumstances and your likes and dislikes before acting on them.


Your investment objective and risk tolerance are not fixed in stone. Rather, they will change as your wealth grows, you age, your expenditures change, and the like. Therefore, it’s important to reassess if your investment approach is still well suited to you every year or two, or whenever a major event occurs in your life.


Happy investors consider both risk and return when selecting and managing their investments. Having a strong grasp on your investment objectives and risk tolerance will allow you to pursue an investment approach you will be happy with in good times and bad.


Thank you for reading,


Andrew J. Willms, CWM, JD. LL.M

This Week’s Market Commentator’s Podcast


In this week’s podcast Mike Willms, Director of Trading for the Milwaukee Company, and I discuss the latest Wall Street phenomenon Special Purpose Acquisition Companies (“SPACs”). You can listen to the podcast HERE or on YouTube HERE.

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