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Risk Tolerance Survey

1.  If you have significant experience with any of the investment types below, give yourself the number of points indicated.
Stability (0 points)
     -Savings and checking accounts, certificates of deposit,
      money market funds, stable value funds
Income  (3 points)
     -Individual bonds, bond funds, high-yield bond funds
Growth  (5 points)
     -Individual stock, stock funds
Other  (6 points)
     -Real estate (not including your home), options,
      precious metals, commodities, limited partnerships

2.  Which statement about inflation best describes you?

I am satisfied with investments that may keep pace with inflation (not exceed it) with little chance of short-term losses.  (0 points)

I would accept the possibility of moderate losses for the chance to moderately outpace inflation.  (8 points)

I hope to significantly outpace inflation, even with a greater potential for loss.  (14 points)


3.  You have invested in a fund that, historically, has gained 10% per year, though it has sometimes gained 25% or lost 10%.  Since buying shares one year ago, you have lost 10%.  You would:

Sell your position  (0 points)
Sell half and hold the rest  (4 points)
Hold  (10 points)
Buy more shares  (14 points)
    

 

 

 4.  What is your main concern when you choose an investment?

Only the potential for loss  (0 points)
Mainly loss potential, but also gain potential  (4 points)
An equal concern for loss and gain potential  (6 points)
Mainly gain potential, but also loss potential  (10 points)
Only the potential for gain  (14 points)

5.  You have $5,000 to invest for 5 years.  Choose one:

Investment X:  Will definitely gain $500  (0 points)
Investment Y:  70% chance of gaining $1,000 or more
   and 30% chance of losing $500  (10 points)

6.  One year ago, you invested $20,000 in a growth fund.  The market fell, and now your shares are worth $16,000.  If you had chosen a stable investment, you'd have $21,000 today.  You decide to:

Sell and switch to a much safer investment  (0 points)
Keep your investment as is  (6 points)
Switch to a different growth fund to recoup your
     losses  (8 points)
Buy more shares of the fund at a lower price  (13 points)

7.  If every one of your funds loses money this year, will you be likely to sell at least some of your shares and invest the proceeds more conservatively?

Yes  (0 points)
No  (11 points)

8.  Would you ever borrow money to purchase stock?

Yes  (10 points)
No  (0 points)

 

Add up your points to get a rough idea of your risk tolerance level.
LOW RISK
0-39 points		 MODERATE RISK
40-74 points		 HIGH RISK
75+ points
 You are a conservative investor who wants  high stability and can accept low returns.     Your challenge is to avoid investing too conservatively.  You are comfortable with a mix of low- and high-risk investments.  Your challenge is to grow neither too fearful of the market nor too complacent. You are a roll-the-dice investor who wants maximum return.  Your challenge is to prudently scale back your aggressiveness as retirement nears.


Consider these suggested asset allocations
Match your risk tolerance level (from above) and your years until retirement in the charts below.  Consider all your assets, not just your 401(k).

Low Risk                                         Moderate Risk                                    High Risk