Do We Have a Risk Epidemic?
by Noah Burns
What is the “top” of the market? In general, it is a point at which stocks have increased in a significant way before reversing into a decline or bear market. While the top is characterized by high investor satisfaction, it is also a time in which clients and investors are more likely to increase the risk of their portfolio. Our team starts to worry about market reversals when investors widely disregard the risks of the market. Are we seeing that now?
In my opinion we are seeing this lack of respect in terms of risk outside of the stock market to an extent that is truly worrisome, but it has yet to reach full blown mania inside the stock market. Here’s what I’m seeing:
In my opinion we are seeing this lack of respect in terms of risk outside of the stock market to an extent that is truly worrisome, but it has yet to reach full blown mania inside the stock market. Here’s what I’m seeing:
The Domination of Sports Betting
Dave Ramsey, a personal finance expert and author, claims that “the fastest growing addiction that is destroying young men in their 20s is online sports gambling.”1 I agree!
I will not comment on the ethics of gambling or whether it should be better regulated, but I do think that the pervasiveness of this type of risk is troublesome. It is everywhere. You cannot watch a sporting event without being inundated with advertisements from betting platforms.
Some interesting stats: 22% of Americans have an account with an online sportsbook according to one poll. According to another, 25% of sports bettors have missed bill payments because of wagers and 52% carry a credit card balance.2, 3
Like it or not, sports betting is now a part of our overall economy. Too much risk anywhere in the economy can bleed into other industries and consumer behaviors.
I will not comment on the ethics of gambling or whether it should be better regulated, but I do think that the pervasiveness of this type of risk is troublesome. It is everywhere. You cannot watch a sporting event without being inundated with advertisements from betting platforms.
Some interesting stats: 22% of Americans have an account with an online sportsbook according to one poll. According to another, 25% of sports bettors have missed bill payments because of wagers and 52% carry a credit card balance.2, 3
Like it or not, sports betting is now a part of our overall economy. Too much risk anywhere in the economy can bleed into other industries and consumer behaviors.
The Rise of Prediction Markets
Similar to sports betting, there are other betting markets that have gained popularity. These prediction markets allow users to bet on non-sports related outcomes like election outcomes, Oscar nominations, or who will win this season of Survivor. To me, this takes what is happening in sports betting and cranks up the insanity. Have we forgotten that “the house always wins”? This completely differs from the stock market. Through proper asset management as well as discipline and patience investors can stack the odds in their favor over long-term
time horizons.
time horizons.
“Chasing Shiny Objects”
Let’s pivot to look at risk taking in the stock market. I do not believe that we are at peak mania, however there is at least one troubling sign from our discussions with clients. Robert and I have seen an increase in what I call “chasing shiny objects,” which is also known as chasing returns.
This happens when conservative investors start to feel like they are missing out on the returns from riskier investments. For example, we had multiple clients asking about ultra high risk, unregulated assets in August. This type of return chasing rarely pays off. Think of conservative investors as the last people to the party. When they show up, the party is usually almost over.
Unfortunately it has distracted investors from their core risk tolerances. Other “shiny objects” we have been asked about recently are gold and AI stocks. I do not believe we are seeing the “irrational exuberance” that caused the dot-com bubble quite yet, but I believe there at least some warning signs.
This happens when conservative investors start to feel like they are missing out on the returns from riskier investments. For example, we had multiple clients asking about ultra high risk, unregulated assets in August. This type of return chasing rarely pays off. Think of conservative investors as the last people to the party. When they show up, the party is usually almost over.
Unfortunately it has distracted investors from their core risk tolerances. Other “shiny objects” we have been asked about recently are gold and AI stocks. I do not believe we are seeing the “irrational exuberance” that caused the dot-com bubble quite yet, but I believe there at least some warning signs.
Conclusion
What is your risk tolerance? As I have written before, risk tolerance changes with age, circumstances, life events, and more. With a combination of high valuations and widespread risk acceptance, it’s a perfect time to review your personal risk tolerance with us.
Robert’s Corner
by Robert Burns
Practicing What I Preach
After forty years as a financial professional, I find myself reflecting more than ever on the guidance I’ve given to hundreds of clients. Serving them has been an honor – one of the greatest privileges of my career. Their trust allowed me not only to help them make sound decisions, but to share in their milestones, challenges, and dreams.
Recently, I turned 66 years old. That puts me just one year away from qualifying for full Social Security benefits, which is one of those milestones I’ve talked countless clients through. Yet now that it’s my turn, I’m discovering something humbling: it’s surprisingly confronting to take my own guidance. I’ve helped others prepare for this exact moment, but standing here myself feels different. It’s personal. It’s real.
Our team’s core belief has always been, “Life is about relationships and experiences.” That idea has shaped the way I work and live. Now it raises an important question for me: When will I pull the trigger on retirement? The practical side of me evaluates timing, benefits, and long term security. But another part feels a quiet excitement and an anticipation for the next chapter I get to create.
I’ve heard so many stories from clients about what a fulfilling and secure retirement looks like. Some crafted new adventures. Others deepened family bonds or rediscovered passions that had been set aside. Each story has planted a seed in me. And each has reminded me that retirement is not an ending. Retirement is a transition into a life shaped by choice, purpose, and gratitude.
As I consider my own journey, I want to remind everyone that my team and I are here to help you navigate yours. Whether it’s retirement planning, Social Security timing, or any financial decision weighing on your mind, we’re ready to provide clarity, guidance, and a plan that fits your life.
I owe it to the people who have taught me so much (friends, clients, family) to approach this stage with the same clarity and courage I’ve encouraged in others. As this journey unfolds, I promise to keep everyone posted on my status. Practicing what I preach may be the next meaningful step in my journey.
Recently, I turned 66 years old. That puts me just one year away from qualifying for full Social Security benefits, which is one of those milestones I’ve talked countless clients through. Yet now that it’s my turn, I’m discovering something humbling: it’s surprisingly confronting to take my own guidance. I’ve helped others prepare for this exact moment, but standing here myself feels different. It’s personal. It’s real.
Our team’s core belief has always been, “Life is about relationships and experiences.” That idea has shaped the way I work and live. Now it raises an important question for me: When will I pull the trigger on retirement? The practical side of me evaluates timing, benefits, and long term security. But another part feels a quiet excitement and an anticipation for the next chapter I get to create.
I’ve heard so many stories from clients about what a fulfilling and secure retirement looks like. Some crafted new adventures. Others deepened family bonds or rediscovered passions that had been set aside. Each story has planted a seed in me. And each has reminded me that retirement is not an ending. Retirement is a transition into a life shaped by choice, purpose, and gratitude.
As I consider my own journey, I want to remind everyone that my team and I are here to help you navigate yours. Whether it’s retirement planning, Social Security timing, or any financial decision weighing on your mind, we’re ready to provide clarity, guidance, and a plan that fits your life.
I owe it to the people who have taught me so much (friends, clients, family) to approach this stage with the same clarity and courage I’ve encouraged in others. As this journey unfolds, I promise to keep everyone posted on my status. Practicing what I preach may be the next meaningful step in my journey.
| Business Update! We have started using a new software called “Bookings” to help schedule your Financial Strategy Meetings. When it’s time for your next meeting, you will receive an email with a link. It will bring you to a calendar page and let you book your appointment. If you need a walkthrough, don’t hesitate to reach out to our team. Tax Season is Here! 1099-Rs are mailed at the end of January, and 1099s are mailed in mid-February for most clients and mid-March for some others. If your final documents were mailed to you in March of 2025, then it’s likely the same for 2026. Please use this to make an informed decision regarding when to meet with your tax professional. If you meet in January or February, you may not have the complete picture to provide to them. Need a referral to a qualified tax professional? Email me at [email protected]. |
Sources:
Indices are unmanaged and are not available for direct investment. Past performance is no guarantee of future results and no one can predict the markets with any certainty. Index returns include the reinvestment of dividends but do not include adjustments for brokerage, custodian, and advisory fees. The S&P 500 Index is a capitalization-weighted index that is generally considered representative of the U.S. large capitalization market. Investing involves risk, including the possible loss of principal invested. Asset allocation and diversification do not ensure a profit or help protect against loss. There are no guarantees that the objectives of the strategies mentioned above will be met.