Broker Check

Pricing Trips and Markets

August 15, 2023

Have you ever booked a trip in the “shoulder season?” You know, it’s not “high season” or prime time for travel. These less-than-prime dates are usually enjoyed or acquired at a discounted rate, often because there is a greater risk of the weather not being as agreeable or because kids are back in school—simple supply and demand. 

The “risk” of the weather and higher demands are factors being “priced” into the trip. But what about the unexpected risks of travel? Like a hotel fire, an illness, or extreme unseasonal weather? These are remote and abnormal risks of travel. As a result, there is no “pricing mechanism” for such events. They would more suitably be addressed by . . . travel insurance.

Markets can sometimes put us in a similar situation when considering investments. There are known risks with different types of investments, and they can be “priced” into the cost of owning them at any given time. A proper asset allocation, i.e., portfolio diversification, is an attempt to mitigate the volatility (how much an investment account goes up and down) for a given amount of “risk” an investor is willing to assume. 

However, some circumstances come out of nowhere, like an act of terror or a virus that sends markets on a deep dive. There are no “pricing” mechanisms for such events. They create a period of uncertainty, and that is altogether different. Having a financial plan in place beyond your investment portfolio can make a big difference when you retire. Product allocation and distribution planning can help give you the confidence to see past periods of market uncertainty. Predicting the future isn’t probably a wise investment of your most precious resource. 

Your time. Investing time in preparing for the unexpected could pay dividends in the future. At BPG Planning, we believe in creating PLAN before a portfolio. Here is a brief video explaining more! 

Please feel free to reach out if you have any questions or want to learn more! 


Brian Pitell

BPG Planning