Your Risk Tolerance
When it comes to investing there is always a risk/return trade off. Put all your money in the bank and over time inflation will erode your purchasing power. Invest everything in stocks there is a chance your money might not be there when you retire.
Successful investing starts with a clear understanding of your own personal risk tolerance. Assessing your risk tolerance is different for every person. You need to start by looking at how you feel about your money, investing, and the markets. Our risk questionnaire is designed to do just that.
About the Risk Tolerance Questionnaire
Nobel Prize Winning Science
Built on the academic framework called Prospect Theory that won the Nobel Prize for Economics in 2002, this questionnaire is the first-ever way to pinpoint investor risk tolerance with math and engineer portfolios to fit clients. It will help you understand your feelings and biases regarding financial risk in the context of your own personal financial position.
Capturing Investor's Risk Fingerprint
The resulting questions capture an investor's "Risk Fingerprint." As the name suggests, each investor has their own personal risk tolerance that is as unique as a fingerprint.
As one would expect, answering the questionnaire using fictitious amounts (for example, using someone else’s financial position or misstating the input amounts) will almost certainly generate an inaccurate outcome. The true outcome of the questionnaire is likely to match the investor’s gut.