WHEN INVESTMENT STYLES CLASH.

• Position: Brief Article

They are a dual-career couple, each earning a high salary. Both feel that it's important to invest a portion of their salaries. There is just one small problem: one of them is strongly risk-averse, preferring conservative investments such as certificates of deposit and money market funds, while the other one is a risk-taker who loves tech stocks and initial public offerings.

A clash of investment styles is common in marriages, especially among dual-career couples. The same goes for individuals who bring sizable portfolios to a second marriage. So what do financial planners recommend that couples do when their investment styles clash? According to the Financial Planning Association, Denver, Colo., it is advisable to:

Discuss your different investment styles. Just talking about your investing perspectives, which typically revolve around how you value money and how your family treated money during your upbringing, may iron out some of your differences.

Bring in an objective advisor. If you can't resolve your differences on your own, a financial planner or other investment advisor can bring an impartial, knowledgeable perspective to the issue. Among other things, he or she can explain the issue of investment risk and reward, provide insight into your money personalities, and help you identify goals and design a portfolio that suits your needs.

Learn about investing. Differing risk tolerances are what typically cause clashing investment styles. One partner is willing to take more risk than the other. While "money personality" is a factor in how people invest, our tolerance for risk is also influenced by our understanding of how investments work. Often, the more the couple learns about the long-term volatility and returns of various investments and how the mixture of different types of investments can reduce the volatility of a portfolio over time, the less likely the couple will clash over investments. For example, the more conservative investor might recognize the need for some aggressive positions to help the portfolio stay ahead of inflation, while the risk-taker might learn how more conservative investments can reduce overall portfolio volatility without seriously undermining the...