I recently sat down with a client who had just moved to Israel and wanted to review his investment strategy. As we started the conversation, he asked, “Doug, how do I know if I should take big risks or play it safe with my investments?”
This is a question I hear often, especially from people adjusting to new financial landscapes, like Americans living in Israel. I shared with him that there isn’t a one-size-fits-all answer. It depends on his goals, risk tolerance, and personal financial philosophy.
The Risk-Takers: Elon Musk
To make the point clearer, I brought up two well-known figures in the world of investing: Elon Musk and Warren Buffett. “Look at Musk,” I said. “He thrives on risk. When SpaceX’s Starship exploded, he didn’t see it as a failure; he saw it as a learning opportunity. He makes big moves, like buying Twitter or merging SolarCity with Tesla. He bets big, and he’s in it for the long haul.”
He nodded, “Does that mean I should be more like Musk?” he asked. I replied, “Not necessarily. Musk’s success with Tesla and other ventures shows that taking calculated risks can pay off, but it’s not the only way to build wealth.”
The Patient Investor: Warren Buffett
Then, I shared a different perspective with him, one that resonates with many of my more conservative clients: Warren Buffett’s. “Buffett has a completely different approach,” I explained. “He’s all about patience. He invests in strong companies and holds onto them for years, sometimes decades. Take his investment in Coca-Cola during a rough period in the 1980s or American Express during a crisis in the 1960s. He sees value where others don’t… and he sticks with his choices.”
Are You a Buffet or a Musk?
My new client seemed thoughtful, contemplating the two paths. “So, which one is better?” he asked. I responded, “It’s not about which is better, but which fits you better. It’s about knowing your own comfort level with risk and aligning it with your long-term goals.”
Wondering which investment approach suits you best? Sign up for a free Cross-Border Financial Evaluation at www.profile-financial.com/call and we can work together to develop a personal approach for you.
Douglas Goldstein, CFP® is the director of Profile Investment Services, Ltd. www.Profile-Financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.
Published December 31, 2024.