My Risk Profile

Your tolerance to risk is probably the most important factor to consider before investing. To achieve higher returns, you will have to be prepared to accept a higher risk of capital loss and vice-versa. It is what we call the 'risk/return trade-off'. Take this Risk Profile Test below to know what type of an investor you are and follow an investment asset allocation that suits you.



1. How familiar are you with the investment markets?
	Very little understanding or interest
	Not very familiar.
	Have enough experience to understand the importance of diversification.
	Understand that markets fluctuate and that different asset classes offer different income, growth and taxation characteristics.
	Experience with all investment sectors and understand the various factors which may influence performance.
2. How long do you intend to invest your current savings?
	Short term (1-2 years)
	Medium term (2-5 years)
	Medium-long term (5-7 years)
	Long term (more than 7 years)


3. Will you need to access the invested funds during the term of the investment?
	Yes
	No
4. Inflation erodes the value of your savings. Growth investing can counter the eroding effect of inflation but will also expose you to the risk of short-term losses.
	I am comfortable with this trade off to beat inflation.
	I am conscious of the risks inflation presents, but would prefer a middle ground.
	Inflation may erode my savings but I have no tolerance for loss.
5. Which of the following risk/return scenarios would you be most comfortable with?
	Low risk/return (maximum return 6% pa, minimum return 3% pa)
	Moderate risk/return (maximum return 8% pa, minimum return -5% pa)
	Above average risk/return (maximum return 12% pa, minimum return –10% pa)
	High risk/return (maximum return 20% pa, minimum return -25% pa)


6. What would you do if your investment dropped in value from an initial Rs 1,000 to Rs 850?
	Move the entire investment to cash
	Move some of the investment to cash
	Give it more time
	Buy more of the investment.
7. What is the most aggressive investment you’ve ever made?
	Shares-Mid Cap, Small Cap & Sectorial MFs
	Mutual Funds/Bluechips/Index Funds
	Property Investments
	Insurance Polcies
	Savings Bank/FDs
8. If you were investing in a share portfolio, which of the following would suit you best?
	A portfolio of potentially high-returning shares whose value could rise or fall dramatically
	A blue chip portfolio which pays regular dividends
	A mixture of the above two options
	I am not interested in shares

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Sykes & Ray Financial Planners - Financial Planning, Insurance, Investment, Retirement, Tax, Life's Goals & Dreams - Mumbai - India