Investment Risk Tolerance: What’s Yours?
The old adage that the higher returns you receive when investing, the higher the risk is one that everyone should pay close attention to, but when it comes to investing, how do you know what your risk tolerance is? Here are five quizzes to help you determine your risk tolerance:
How Much Risk Can You Handle?: This is a 20 question quiz “designed to get you thinking about your attitude toward – and capacity for – risk.” From these questions they will determine your score which will reveal how much risk you can afford and how much you can tolerate. In addition their will be suggestions of typical investment portfolios based on your answers.
Investment Risk Tolerance Quiz: This is a 20 question quiz to help you get an idea of your risk tolerance. The quiz was developed by 2 Kansas State University professors and by taking the quiz, you will help contribute to a study on measuring financial risk tolerance.
Risk Tolerance Quiz: This is a 10 question quiz which bills itself as “a simple guide to help you better understand your risk tolerance level.” Once you have finished, you can also take a Risk Capacity Quiz.
Do you Like Investment Risks? Dare You To Find Out: This is an 8 question quiz that will help you find out your money personality and where your tolerance ranks in the investment world.
Risk Tolerance Quiz: this is a 7 question quiz that will help determine your investment style.
Why 5 risk tolerance quizzes? You see when taking them that they approach risk from different perspectives and no one test is a perfect indicator of you risk tolerance. By taking several of them, however, you should be able to confirm a pattern to help determine your true risk tolerance. Enjoy and see if your perceptions of your risk tolerance match what the quizzes say.
Hat Tip: Enough Wealth
Excellent point regarding risk tolerance. Many times people chase higher return by investing in risky investments, however, they don’t realize their risk tolerance. Even if the risky investment may ultimately yield high returns, it may be extremely volatile and have wide swings in upward/downward direction which may make many investors nervous. So it’s essential to know risk tolerance.