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.
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
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.
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.
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.
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.
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/