Clashing investment personalities? We can help resolve the conflict

Feb 19, 2019
Stressed couple reviewing financial statement

One spouse wants a sports car, the other a minivan. Perhaps an SUV may be a suitable compromise. Or get two cars and keep everyone happy. For some couples, the same kind of dilemma arises when investing.

Say that one spouse, by nature, is a conservative investor, suffering restless nights when investments drop in value. The other spouse is a more aggressive investor who’s perfectly comfortable sitting through the market’s ups and downs, confident that the investment trend is upward over time.

Does this sound at all familiar to you?

If investment personality clashes are posing a challenge to your relationship, here are three approaches that may help.

Keep your eye on the prize

Investment objective and time horizon, along with risk tolerance, are the key factors that drive the composition of your portfolio. Sometimes, a specific objective and corresponding time horizon point toward investments aligned with one spouse’s tolerance to risk. If the other spouse agrees, then you have a fortunate case of practicality trumping personal differences.

Say a couple starting out is saving for a down payment on a house. This goal has a limited time horizon and their potential home is at stake, so the spouse who normally wishes to invest aggressively may be content to stay away from higher-risk investments. Or, take the savings goal of a couple building their retirement nest egg. A look at investment projections may persuade the conservative investor to include higher-risk investments to achieve the potential returns they need.

Meet in the middle

With this strategy, the couple meets halfway, creating a diversified portfolio that adjusts the risk level by about the same degree for each spouse. It means finding a weighting between equities and fixed income that strikes an agreeable compromise, eliminating or minimizing the most aggressive and conservative holdings.

It’s a strategy that may benefit both spouses. The aggressive investor won’t take on any undue risk, and the conservative investor might take better advantage of market opportunities.

Agree to disagree

Compromise doesn’t work for every couple. Sometimes the solution is for each spouse to keep his or her own portfolio. At first glance, this might look like two people agreeing to disagree, not a strategy involving partnership, but the net effect is actually a well-rounded approach.

For example, say the couple has independent, non-registered accounts dedicated to retirement savings. Both spouses stay true to their investment philosophies and make their own investment decisions. In combination, the two portfolios nicely balance long-term growth potential and capital preservation.

If you and your spouse have conflicting ideas about investing, talk to us. We’ll see if one of these approaches may work or develop a customized solution.

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