Wednesday, April 10, 2013

Risk Profile of a Trader or Investor

Check your Risk Profile


Indian Investors Welfare Club

Please fill out ALL information in BLOCK capitals using either a blue or black ball point pen.

Risk Tolerance Questionnaire
Please answer the questions by circling one answer for each question that best  reflects your feelings. If none of the options feels right for you, try to choose the option that is closest.

Questions Points
Question 1 - What aims are you looking to achieve?
A         Asset Growth                                                                                                 6
B         Liability Cover                                                                                               4
C         Pension accrual                                                                                              4
D         100% defensive, wealth preservation                                                          0

Question 2 - Over what period are you looking to achieve these aims?
A         Less than 2 years                                                                                           -10
B         3 – 5 years                                                                                                         6
C         5 – 10 years                                                                                                       9
D         More than 10 years                                                                                        10

Question 3 - Do you have any savings?
A         None                                                                                                               0
B         Yes, up to 25% in cash                                                                                  2
C         Yes, up to 50% in cash                                                                                  4
D         Yes, greater than 50% in cash                                                                      6

Question 4 - Do you ever invest in individual shares or mutual funds ?
A         No, do not want to                                                                                          -3
B         No, happy to                                                                                                    3
C         Yes, do not want to                                                                                         -3
D         Yes, happy to                                                                                                  6

Question 5 - What would be your reaction if your portfolio dropped 10%?
A         Sell, 100% risk averse                                                                                  -3
B         If further drop, then sell                                                                                 1
C         Hold position                                                                                                   6
D         Hold and further increase position                                                                12

Question 6 - What type of returns are you looking to achieve?
A         5 – 9% per annum, 7% average, will accept a 3% drop                             -6
B         3 -12% pa, 8% average, will accept up to 5% drop                                     1
C         0 - 20% pa, 12% average, will accept up to 10% drop                                6




Question 7 - What movements/changes in the portfolio are acceptable over  12 months?
A         Very limited                                                                                                    0
B         Limited                                                                                                           3
C         Similar to stock market                                                                                 6
D         Greater than stock market fluctuations                                                       9

Question 8 – Do you require income as a result from your portfolio, on top of your income from other source, to be used for your regular expenses?

A         Yes, more than 10%                                                                                      -3
B         Yes, 5 – 10%                                                                                                   0
C         Yes, 0 – 5%                                                                                                     6
D          No                                                                                                                 12

Scores Profile
45+ points Dynamic   /   35 – 45 points Neutral   /  25 – 35 points Defensive   /  15 – 25 points Conservative   /   Under 15 points Safe / Income

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