Because adhering to your plan should give you the greatest chance of achieving your financial goals, it’s critical that your plan not assume more risk than you have the ability, willingness or need to take. It’s equally critical you don’t invest in any strategy that contains risks you don’t understand. The reason for this warning is because any asset class or strategy can experience very long periods of underperformance.

If you don’t understand that risk, you’ll likely make the mistake of confusing strategy with outcome. That could lead you to abandon your plan when a long period of underperformance occurs.

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