Risk Profile Assessment

When investing, it is important to consider the level of risk you may be taking on and the return you would like to achieve from an investment. You may need to consider a trade-off between the risk you are willing to take and the level of return you would like to achieve in order to meet your needs and objectives.

Risk can have different meanings to different people. For example, investment risk could mean:

  • the possibility of a loss of capital (permanent reduction in the value of an investment);
  • the level of volatility of an investment (short-term changes in value – up and down);
  • the risk of an asset not producing enough income to live on; or
  • the risk of an asset not growing enough to keep up with the rising cost of living.

By working through this Risk Assessment, our aim is to understand more about:

  • your risk capacity;
  • your risk tolerance; and
  • your risk appetite and how to balance this against your desire to achieve your needs and objectives.

This will assist us in working out an appropriate level of investment risk as per your personal situation, and the type of investments and strategies that correspond with the level of risk.

Below is a Questionnaire to Assess your Risk Appetite

1. How familiar are you with investment markets?
2. Have you ever invested a significant amount of money into an investment that fluctuates up and down in value? How did this make you feel?
3. How would you describe your willingness to take financial risks?
4. Which is the most important to you in regards to investing?
5. How much could your investment fall in value over a short term period before you feel uncomfortable?
6. What would your reaction be if your portfolio value decreased substantially, mainly due to adverse market conditions?
7. Which of the following best describes your general feeling after making a significant financial decision?