Investing Fundamentals: What is my Risk Profile?

Quiz Questions

• 1.
  Which of the following best describes your current stage of life?

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  • A.
    Single with few financial burdens. Ready to accumulate wealth for future short term and long term goals.
  • B.
    A couple without children. Preparing for the future by establishing a home. Expecting to have or already have a high purchase rate of household and consumer items.
  • C.
    Young family with a home. You have a mortgage and childcare costs and maintain only small cash balances.
  • D.
    Mature family. You are in your peak earning years and your mortgage is under control. You both work and you may or may not have children that are growing up or have left home. You’re ready to start thinking about your retirement years. 
  • E.
    Preparing for retirement. You own your home and have few financial burdens; you want to ensure you can afford a comfortable retirement.
  • F.
    Retired. You rely on existing funds and investments to maintain your lifestyle in retirement. You may already be receiving a Government pension and/or Superannuation pension
• 2.
  How secure is your current and future income?

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  • A.
    Not secure
  • B.
    Somewhat secure
  • C.
    Fairly secure
  • D.
    Very secure
• 3.
  How familiar are you with investment matters?

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  • A.
    Not familiar at all with investments and feel uncomfortable with the complexity
  • B.
    Not very familiar when it comes to investments.
  • C.
    Somewhat familiar. I don’t fully understand investments, including the share market.
  • D.
    Fairly familiar. I understand the various factors which influence investment performance
  • E.
    Very familiar. I use research and other investment information to make investment decisions. I understand the various factors which influence investment performance.
• 4.
  How long would you invest the majority of your money before you think you would need access to it?

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  • A.
    In 2 years or less
  • B.
    Within 3 - 5 years
  • C.
    Within 6 - 10 years
  • D.
    Not for 10 + years
• 5.
  When considering your investments and making investment decisions, do you think about the impact of possible losses or possible gains?

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  • A.
    I am most concerned about potential losses
  • B.
    I am more concerned about potential losses
  • C.
    I am more concerned about potential gains
  • D.
    I am most concerned about potential gains
• 6.
  Assume you had an initial investment portfolio worth $100,000. If, due to market conditions, your portfolio fell to $85,000 within a short period, say a month, would you:

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  • A.
    Sell all of the investments? You do not intend to take risks
  • B.
    Sell a portion of your portfolio to cut your losses and reinvest into more secure investment assets
  • C.
    Hold the investment and sell nothing, expecting performance to improve
  • D.
    Invest more funds to lower your average investment price
• 7.
  If the value of your investments then fell to $60,000 over the next 12 months, would you:

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  • A.
    Sell all of the remaining investment
  • B.
    Sell a portion of the remaining investment
  • C.
    Hold your investments and sell nothing, expecting conditions to improve
  • D.
    Invest more funds. You can tolerate short term losses in expectation of future growth
• 8.
  Which one of the following statements describes your feelings towards choosing an investment?

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  • A.
    I would prefer investments with little or no fluctuation in value and have a low degree of risk associated with them. I am willing to accept the lower return associated with these investments.
  • B.
    I prefer to diversify with a mix of investments that have an emphasis on low risk. I am happy to have a small proportion of the portfolio invested in assets that have a higher degree of risk in order to achieve a slightly higher return.
  • C.
    I prefer to have a spread of investments in a balanced portfolio.
  • D.
    I prefer to diversify my investments with an emphasis on more investments that have higher returns, but still having a small amount of low risk investments.
  • E.
    I would select investments that have a higher degree of investment price fluctuation so that I can earn higher long term returns.
• 9.
  As a gut feel, which portfolio appeals to you?

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  • A.
    Low
  • B.
    Low - Med
  • C.
    Med
  • D.
    Med - High
  • E.
    High
  • F.
    Extreme
• 10.
  Understanding extreme investment risks can be similar to 'betting', would you consider yourself a punter? (would you bet?)

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  • A.
    Not likely at all
  • B.
    I've been known to dabble on the slappers (poker machines) but no more than $5 or $10 here or there
  • C.
    I regularly bet and am able to accept the risk of a gamble

Quiz Outcomes

• 1.
  Low Risk 

  Essentially, you don't like taking risks. You like to protect your assets and build your equity slowly from reliable sources.Suggested Portfolio Build:Low Risk: 85%Medium Risk: 15%High Risk:Extreme Risk: But what investments are best for me? Find out in the next blog post! Link to come soon!
• 2.
  Low - Med Risk

  Essentially, you don't like taking risks. You like to protect your assets and build your equity slowly from reliable sources.Suggested Portfolio Build:Low Risk: 75%Medium Risk: 15%High Risk: 10%Extreme Risk: 0%But what investments are best for me? Find out in the next blog post! Link to come soon!
• 3.
  Med Risk

  Essentially, you like balance. You like to protect your assets but don't mind taking on some calculated risk to grab some gains.Suggested Portfolio Build:Low Risk: 50%Medium Risk: 25%High Risk: 20%Extreme Risk: 5%But what investments are best for me? Find out in the next blog post! Link to come soon!
• 4.
  Med - High Risk

  Essentially, you like balance. You like to protect your assets but don't mind taking on some calculated risk to grab some gains.Suggested Portfolio Build:Low Risk: 30%Medium Risk: 30%High Risk: 30%Extreme Risk: 10%But what investments are best for me? Find out in the next blog post! Link to come soon!
• 5.
  High Risk

  Essentially, you like to risk it for the biscuit. You love to take on risk for some additional gains and can handle the downsides and volatility of markets.Suggested Portfolio Build:Low Risk: 20%Medium Risk: 25%High Risk: 35%Extreme Risk: 20%But what investments are best for me? Find out in the next blog post! Link to come soon!
• 6.
  Extreme Risk

  Essentially, you like to risk it for the biscuit. You love to take on risk for some additional gains and can handle the downsides and volatility of markets.Suggested Portfolio Build:Low Risk: 10%Medium Risk: 20%High Risk: 20%Extreme Risk: 50%But what investments are best for me? Find out in the next blog post! Link to come soon!