Risk Aversion Quiz
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Conservative investor: 0-18 points
The conservative investor is highly risk averse and very much focuses on wealth preservation through minimizing exposure to risks threatening to reduce wealth. Therefore, often low-risk-low-return assets with high liquidity such as bonds or money market funds are targeted investments. The reason for the low risk is usually the requirement to soon be able to access the funds (e.g. before retiring or putting money into a big acquisition) which is why the conservative does not want to risk losing bigger amounts of wealth shortly before the goal is reached.Recommended Asset Classes: Market Equities and Bonds
To learn more about the core concepts personal finance and investing, different asset classes and to receive your individual investment plan, visit the Entrepreneurial Personal Finance course to ignite your journey towards financial independence! (@Rahul link in this prior sentence) Hello this is not rahul but this is still Rahul
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Cautious investor: 19-22 points
The cautious investor has a rather high risk aversion and mainly wants to preserve his wealth through low exposure to risky investments. Therefore, his portfolio mostly consists of low-risk-low-return assets with high liquidity such as bonds or money market funds. However, as the investor is not strongly focused on wealth preservation like the conservative investor because the investment is not needed right now but in up to five years, a small part of the portfolio is investing in riskier assets such as dividend-stocks to provide some upside potential.Recommended Asset Classes: Money Market Equities, Bonds, Listed Properties Equities (REITs)
To learn more about the core concepts personal finance and investing, different asset classes and to receive your individual investment plan, visit the Entrepreneurial Personal Finance course to ignite your journey towards financial independence! (@Rahul link in this prior sentence)
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Balanced investor: 23-28 points
The balanced investor has a medium risk aversion and wants to achieve a mix of wealth preservation and asset growth. This is usually achieved through a well-diversified portfolio consisting of fixed-income instruments and stocks. The weights of each asset class depend on which balanced spectrum the investor is with an increased focus on stocks with lower risk aversion. Usually, the balanced investor also has a longer investment time horizon between 5 to 15 years.Recommended Asset Classes: Bonds, Listed Properties Equities (REITs), Stock Equities, Real Estate, Business
To learn more about the core concepts personal finance and investing, different asset classes and to receive your individual investment plan, visit the Entrepreneurial Personal Finance course to ignite your journey towards financial independence! (@Rahul link in this prior sentence)
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Bold investor: 29-32 points
The bold investor has a rather low risk aversion and emphasizes asset growth over preservation. The higher willingness to take risks is depicted in the portfolio through low-weighted fixed income investments and an emphasis on dividend and growth stocks. Market downturns are understood as an opportunity to build more wealth and hence used to invest, also because the investment horizon is between 15 and 25 years.Recommended Asset Classes: Listed Properties Equities (REITs), Stock Equities, Real Estate, Business
To learn more about the core concepts personal finance and investing, different asset classes and to receive your individual investment plan, visit the Entrepreneurial Personal Finance course to ignite your journey towards financial independence! (@Rahul link in this prior sentence)
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Aggressive investor: 33-47 points
The aggressive investor fully focuses on asset growth and is attracted to high-risk-high-return investments. This is depicted in the portfolio through a very little share of fixed income instruments, very high share of growth stocks in the portfolio and even some investments into new companies, IPO’s or start-ups. The aggressive investor’s usual investment horizon is 25+ years, so there is plenty of time for the portfolio to recover from any temporary downturns.Recommended Asset Classes: Stock Equities, Real Estate, Business, Commodities
To learn more about the core concepts personal finance and investing, different asset classes and to receive your individual investment plan, visit the Entrepreneurial Personal Finance course to ignite your journey towards financial independence! (@Rahul link in this prior sentence)
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Question 1 of 13
1. Question
In general, how would your best friend describe you as a risk taker?
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Question 2 of 13
2. Question
You are on a TV game show and can choose one of the following. Which would you take?
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Question 3 of 13
3. Question
You have just finished saving for a “once-in-a-lifetime” vacation. Three weeks before you plan to leave, you lose your job. You would:
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Question 4 of 13
4. Question
If you unexpectedly received $20,000 to invest, what would you do?
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Question 5 of 13
5. Question
In terms of experience, how comfortable are you investing in stocks or stock mutual funds?
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Question 6 of 13
6. Question
When you think of the word “risk” which of the following words comes to mind first?
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Question 7 of 13
7. Question
Some experts are predicting prices of assets such as gold, jewels, collectibles, and real estate (hard assets) to increase in value; bond prices may fall, however, experts tend to agree that government bonds are relatively safe. Most of your investment assets are now in high interest government bonds. What would you do?
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Question 8 of 13
8. Question
Given the best and worst case returns of the four investment choices below, which would you prefer?
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Question 9 of 13
9. Question
In addition to whatever you own, you have been given $1,000. You are now asked to choose between:
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Question 10 of 13
10. Question
In addition to whatever you own, you have been given $2,000. You are now asked to choose between:
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Question 11 of 13
11. Question
Suppose a relative left you an inheritance of $100,000, stipulating in the will that you invest ALL the money in ONE of the following choices. Which one would you select?
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Question 12 of 13
12. Question
If you had to invest $20,000, which of the following investment choices would you find most appealing?
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Question 13 of 13
13. Question
Your trusted friend and neighbor, an experienced geologist, is putting together a group of investors to fund an exploratory gold mining venture. The venture could pay back 50 to 100 times the investment if successful. If the mine is a bust, the entire investment is worthless. Your friend estimates the chance of success is only 20%. If you had the money, how much would you invest?
Diego Castiblanco works as the Web Developer of RINO INVEST, He got his degree in Computer Science from The Universidad Distrital Francisco José de Caldas in 2017, he worked as a full-time Web Developer in UpWork which is one of the best freelancing platforms, he got the Top Rated Plus tag due to his dedication and professionalism serving clients from start-ups to big companies.