At the very beginning, every investor encounters the term “risk profile.” Before moving forward, it’s important to understand it and define your behavior patterns in the financial markets.
With the help of this simple test, you can easily determine your type of investor.
Let’s get started!
- What is your main goal in investing?
A) Achieve high earnings
B) Earn a modest return and protect against inflation
C) Preserve savings from inflation
D) Fully protect your capital
2. What type of investing appeals to you most?
A) Highest potential return with high risk
B) High potential return with moderate risk
C) Moderate potential return with low risk
D) Low potential return with minimal risk
3. What investment return do you expect?
A) More than 12% per year
B) Between 9% and 12% per year
C) Between 5% and 8% per year
D) Less than 5% per year
4. Your knowledge of investments:
A) I know and understand everything
B) I have good knowledge
C) I know a little, but not fully
D) Complete beginner
5. How much of your savings are you ready to invest?
A) All of it
B) More than half
C) Less than half
D) Just a small part
6. How long are you willing to invest for?
A) More than 10 years
B) 5-10 years
C) 3-5 years
D) Less than 3 years
7. What level of asset value loss is acceptable for you?
A) Doesn’t matter
B) 10% to 15%
C) 5% to 10%
D) Less than 5%
8. What would you do if your portfolio dropped by more than 20% due to market changes?
A) Buy more while prices are low
B) Do nothing
C) Sell a portion of the portfolio
D) Sell everything
Now calculate your points:
A — 4 points
B — 3 points
C — 2 points
D — 1 point
Your “risk profile”:
8 to 15 points — Conservative
Focused on maximum capital preservation and protection against inflation. Not willing to take risks.
16 to 24 points — Moderate
Willing to take moderate risks for potential returns, capable of investing a significant portion of available funds.
25 to 32 points — Aggressive
Prefers highly risky investments for the sake of higher returns and is comfortable with portfolio fluctuations.
So, what type of investor are you?