Risk Profiler

Understanding risk is all about determining your capacity for risk and uncertainty, as well as your attitude to risk.

Below are some questions that will help you to determine your attitude to investment.

Capacity for risk

This is determined by factors such as your timeframe, assets, income and other commitments


What is your main objective for investing?

Income for current needs

Mostly income but some capital growth

Both income and capital gain are important

Need capital growth but also some income

Capital growth only for long-term gain


What is your age?

Under 35

35 ? 45

45 - 55

55 - 65

over 65


What are your investment assets worth?

Under $15,000

$15,000 to $50,000

$50,000 to $150,000

$150,000 to $500,000

Over $500,000


How many years do you have until you retire?

Currently retired

less than 5 years

between 5 and 15 years

between 15 and 25 years

more than 25 years


What is your combined annual income (before tax)?

under $40,000

$40,000 to $60,000

$60,000 to $80,000

$80,000 to $120,000

over $120,000


Which statement best describes your expected future earnings over the next five years?

Far outpace inflation (due to promotions, new job)

Stay somewhat ahead of inflation

Keep pace with inflation

Decrease (retirement, part-time work, etc)


How many people are financially dependent on you?

four or more, plus myself

three, plus myself

two, plus myself

one, plus myself

myself only


The cash you have available to handle unexpected financial emergencies such as medical expenses or job loss is

more than six months? net income

between four and six months? net income

between two and four months? net income

between one and two months? net income

less than one month?s net income


Attitude to risk

This is determined by past experiences, your attitude to life, and many other things

Which of the following statements best describes your attitude to investment?

I don?t want to have any uncertainty in the value of my investments

I am willing to have some fluctuations in the value of my investments to gain modest growth, provided the majority of my investments are low risk

I am comfortable with a balance of lower risk and higher risk investments to provide income and growth

I prefer the majority of my investments to be invested in more volatile but higher-returning investments

I prefer higher risk investments that have the potential to generate the highest long-term returns


If you were allocating money for long-term investment, you would choose

cash or bank deposits

government stock or other fixed interest

fixed interest, property and a few shares

predominantly shares, but some property and fixed interest

shares only


You believe investing in shares is like gambling because of the great uncertainty

strongly agree

Agree

neither agree nor disagree

Disagree

strongly disagree


You would be extremely concerned if there were short-term fluctuations in the value of your investments

strongly agree

agree

neither agree nor disagree

disagree

disagree strongly


When making investments, you prefer to have a guaranteed return paid on a certain date, rather than uncertain returns which may be higher or lower

strongly agree

agree

neither agree nor disagree

disagree

strongly disagree


A month after you buy it, an investment falls 15% in a market correction. Assuming none of the company?s fundamentals have changed, do you

Sell it as soon as possible, and put the money in the bank

Sell, but invest in another share

Hold it, and hope it recovers

Buy even more of it - it?s an opportunity

 

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