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
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
agree
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
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
14 - 25: Stable
Capability
You have a low capacity for uncertainty, due to financial constraints such as limited assets, low income-earning potential, or short time frame
Attitude
You are very averse to fluctuations in investment values, and prefer investments that offer stability rather than capital growth. Your primary need is for income in the short to medium term.
26 - 36: Conservative
You have limited capacity for uncertainty in investment values, due to short-term financial constraints.
You are generally averse to fluctuations in investment values, but are willing to have some money invested in growth assets. Your primary need is for income, and to protect your capital.
37 - 47: Balanced
While you have some financial and other constraints, you can afford to take a longer-term view, and can tolerate some uncertainty in income and the value of your investments.
You want to have some certainty but also want your portfolio to have the potential for growth, by investing in growth assets such as property and shares.
48 - 58: Growth
You have few financial and other constraints and can afford to take a longer-term view. You can tolerate a reasonable level of uncertainty in income and the value of your investments.
You have some need for income but a larger need for capital growth over the medium to long term.
You are comfortable with a reasonable level of uncertainty because in general you are seeking longer-term growth. You are relatively comfortable with risk and uncertainty.
59 - 69: Aggressive
Your financial position - income, assets, time horizon - is such that there are few if any constraints on your investments. You have little if any need for income.
You take a long-term view, see risk and uncertainty as opportunity, and are comfortable with high levels of volatility in order to generate the highest level of long-term capital growth.
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