What Type of Investor Are You?

Grab a pen and paper and start answer­ing the investor pro­file ques­tion­naire below. For each of the ques­tions, choose the let­ter of the sen­tence that best reflects you.

1. Which of the fol­low­ing state­ments best describes your finan­cial sit­u­a­tion? Please con­sid­er your reg­u­lar expens­es and your abil­i­ty to repay out­stand­ing loans as well as sav­ing for emer­gen­cies and retire­ment.

A – I need this invest­ment to sup­ple­ment my income.
B – My finan­cial sit­u­a­tion is some­what unsta­ble.
C – I do not cur­rent­ly need this invest­ment to sup­ple­ment my income, how­ev­er this could change over the next few years.
D – I do not expect to use this invest­ment to meet cur­rent income require­ments. How­ev­er, should an unex­pect­ed sit­u­a­tion arise, I may need to access some of these funds.
E – My finan­cial sit­u­a­tion is sta­ble and I have suf­fi­cient cash flow to meet most of my require­ments.
F – My finan­cial sit­u­a­tion is com­plete­ly secure and I can meet emer­gency require­ments with­out with­draw­ing these funds.

2. Which of the fol­low­ing state­ments best describes your cur­rent invest­ment sit­u­a­tion? If you do not cur­rent­ly have any invest­ments, choose the response that best describes how you think you would man­age your invest­ments.

A – All of my invest­ments to date have been in time deposits and bonds because I need the stream of income and/or the
secu­ri­ty of cap­i­tal.
B – Most of my invest­ments were made to gen­er­ate income and pre­serve cap­i­tal, but now I need some cap­i­tal growth.
C – Most of my invest­ments tend to be mutu­al funds, although they are gen­er­al­ly not aggres­sive funds.
D – Most of my invest­ments tend to be mod­er­ate­ly aggres­sive mutu­al funds. My objec­tives are long-term, there­fore I do not often make changes unless my rea­sons for invest­ing have changed.
E – I tend to choose aggres­sive mutu­al funds for long-term growth

3. Which of the fol­low­ing best reflects your cur­rent knowl­edge of invest­ments?

A – Very low: I am start­ing to learn about invest­ing.
B – Low: I know some­thing about invest­ments, but do not have an in-depth knowl­edge.
C – Mod­er­ate: I am famil­iar with basic types of invest­ments.
D – High: I under­stand that there are dif­fer­ent cat­e­gories of invest­ments with dif­fer­ent lev­els of risk and return for each type.
E – Expert: I have a thor­ough knowl­edge of the three major asset class­es, and am very expe­ri­enced in invest­ing.

4. Which cat­e­go­ry would you say best describes your invest­ment goals?

A – Secu­ri­ty: My pri­ma­ry con­cern is the secu­ri­ty of my invest­ments.
B – Income and infla­tion pro­tec­tion: My most impor­tant goal is to receive steady, con­sis­tent income from my invest­ments, but I would also like my mon­ey to keep ahead of infla­tion over the long term.
C – Income and growth: I want my invest­ments to pro­duce a fair­ly steady stream of income and to grow with­out major declines in val­ue.
D – Con­ser­v­a­tive growth: My first goal is the long-term growth of my invest­ments but I am will­ing to accept a low­er return to have less fluc­tu­a­tion in the val­ue of my invest­ments.
E – Growth: I want to get the best rate of return on my port­fo­lio over the long term, and real­ize that the total val­ue of my invest­ments may decline occa­sion­al­ly.

5. Which of the fol­low­ing state­ments best describes your atti­tude towards the lev­el of risk or volatil­i­ty that you are pre­pared to live with dur­ing the same time that these assets will be invest­ed?

A – In gen­er­al, I would feel most com­fort­able with invest­ments that tend to gen­er­ate a more sta­ble return year-to-year, as opposed to those that fluc­tu­ate wide­ly in val­ue.
B – I would pre­fer a com­bi­na­tion of fixed-income secu­ri­ties and blue chip equi­ties, keep­ing the equi­ties por­tion to less than ____% of my total port­fo­lio.
C – I am com­fort­able with volatil­i­ty and seek more aggres­sive invest­ments know­ing that in the short-term, this strat­e­gy may result in declines in my port­fo­lio val­ue.
D – I ful­ly accept volatil­i­ty, seek more aggres­sive invest­ments and do not wor­ry when the stock mar­ket drops sig­nif­i­cant­ly.

6. How would you describe your com­fort lev­el should the val­ue of your invest­ments fluc­tu­ate either up or down dur­ing short-term peri­ods (i.e. up to three years)?

A – Very low: My pri­ma­ry con­cern is the secu­ri­ty of my invest­ments.
B – Low: Any drop in the val­ue of my invest­ments would make me uncom­fort­able, but I could tol­er­ate a minor decline of less than 5% from time to time.
C – Mod­er­ate: I could tol­er­ate a mod­est decline, from 5 to 10%, in the val­ue of my invest­ments, pro­vid­ed that I receive a pos­i­tive long-term return.
D – High: I could tol­er­ate a mod­er­ate decline, from 10 to 20%, in the val­ue of my invest­ments in antic­i­pa­tion of a pos­i­tive long-term return.
E – Very high: I could tol­er­ate a decline of 20% or more in the short-term val­ue of my invest­ments, in antic­i­pa­tion of a pos­i­tive longterm return.

Done? Check below the point val­ues of the answers you select­ed then add up all the points. Divide the total by six (6) to get your Final Score. Final­ly, com­pare the Final Score with the Score­card to check your Investor Cat­e­go­ry and Risk Lev­el.

Scoring

1. A – 0 ; B – 0 ; C – 10 ; D – 20 ; E – 30 ; F – 40

2. A – 0 ; B -10 ; C – 20 ; D – 30 ; E – 40

3. A – 0 ; B – 10 ; C – 20 ; D – 35 ; E – 50

4. A – 0 ; B – 10 ; C – 20 ; D – 30 ; E – 40

5. A – 10 ; B – 20 ; C – 30 ; D – 40

6. A – 0 ; B – 10 ; C – 20 ; D – 35 ; E – 50

Interpretation of Scores

Score: 0–9
Investor Cat­e­go­ry: Cash
Risk Lev­el: No Risk
Your pri­ma­ry con­cern is earn­ing a mod­est income while pro­tect­ing your invest­ment prin­ci­pal. You are will­ing to accept low­er returns in exchange for greater secu­ri­ty.

Score: 10–19
Investor Cat­e­go­ry: Income/Conservative
Risk Lev­el: Income/Low
You are look­ing for a com­bi­na­tion of growth and income, with an empha­sis on income. You would like your invest­ments to pro­duce a fair­ly steady stream of income and to grow with­out major declines in val­ue.

Score: 20–29
Investor Cat­e­go­ry: Bal­anced
Risk Lev­el: Mod­er­ate
You are look­ing for a com­bi­na­tion of growth and income, with an empha­sis on growth. You would like your invest­ments to grow over time with­out wide fluc­tu­a­tions in your port­fo­lio val­ue.

Score: 30–39
Investor Cat­e­go­ry: Growth
Risk Lev­el: Mod­er­ate
Your pri­ma­ry objec­tive is to see the val­ue of your invest­ments increase that may reach 20% over the long term. You accept the risk of short-term declines in the val­ue of your over­all port­fo­lio, in order to achieve long-term growth in your port­fo­lio.

Score: 40+
Investor Cat­e­go­ry: Aggressive/High Growth
Risk Lev­el: High
You are will­ing to take the risks nec­es­sary to achieve poten­tial­ly above-aver­age long-term growth in your port­fo­lio. You accept that the total val­ue of your port­fo­lio may decline sub­stan­tial­ly from time to time.

Quiz tak­en from:  https://www.pinoymoneytalk.com/test-what-type-of-investor-are-you/