Risk Assessment - The First Step

CONQUEST Risk Assessment

It is critical to fit an investment strategy with your capacity to take risk. This short questionnaire may help you and your advisor adopt a wealth management strategy that is right for you.

Question 1:
To what extent do you agree or disagree with the following?

"Maximizing returns is more important than protecting my investment."

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

Question 2:
To what extent do you agree or disagree with the following?

"I do not foresee any major expenses that would require significant principal withdrawals from this investment account in the next five years."

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

Question 3:
What percentage of your total investable net worth (excluding primary residence) does this portfolio represent?

Less than 20%
20% to 40%
40% to 60%
60% to 80%
80% to 100%

Question 4:
On a long-term basis, what average annual rate of return best reflects your objective for "total return" on your portfolio?

More than 10% per year
8% to 10% per year
6% to 8% per year
4% to 6% per year
Less than 4% per year

Question 5:
When do you expect this investment account to provide a regular source of income?

More than 20 years or never
10 to 20 years
5 to 10 years
3 to 5 years
3 years or less

Question 6:
To what extent do you agree or disagree with the following?

"I have had prior experience with and understand the concept of investment risk related to stocks, bonds, mutual funds, and other investments."

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

Question 7:
How would you describe your general attitude toward investing?

	I want to maximize the return on my investments and am willing to accept large fluctuations in value. I understand and accept that aggressive growth investments can result in substantial losses to my principal.
	I am willing to accept considerable risk in order to pursue higher long-term returns. While capital preservation is important over a long time frame, I am willing to accept significant short-term fluctuations in my portfolio.
	I am willing to accept moderate risk in order to pursue somewhat higher returns. Both reducing risks and enhancing returns are important to me.
	I am most concerned with preserving the principal value of my investments. I am comfortable with the lower returns associated with more conservative investments.

Question 8:
What approximate loss in any one-year period would you be willing to accept before deciding to liquidate your investment?

(25%) or greater loss
(15%) to (25%) loss
(10%) to (15%) loss
(5%) to (10%) loss
Minimal loss

Question 9:
To what extent to you agree or disagree with the following?

"My income is adequate and stable and my debt level is low."

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

Question 10:
What do you believe is an adequate time frame for evaluating portfolio returns?

More than 10 years
5 to 10 years
3 to 5 years
1 to 3 years
Less than 1 year

Question 11:
To what extent to you agree or disagree with the following?

"I am willing to wait several years to recover from losses I incur in an extended down market."

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

My risk score:

0-25 = Conservative

Conservative investors target capital preservation and weight their portfolios more heavily with bonds or cash investments than in stocks.

26-50 = Balanced

Balanced investors might tend toward a more even split between stock and stock funds on the one hand, and bonds, bond funds, or other fixed income investments in the other.

51-75 = Moderate Growth

Moderate growth investors’ portfolios target growth by biasing a portfolio more toward stocks and stock mutual funds than bonds.

76-100 = Aggressive Growth

Aggressive growth investors’ portfolios target growth by investing heavily in stocks and stock mutual funds, despite the risk of losses that they carry.

THE "RISK/RETURN" TRADEOFF

Risk / Return Tradeoff

The chart above depicts the historic "risk/reward tradeoff" between different portfolio mixes of stocks and bonds.

DISCLOSURE:

This questionnaire is intended to serve as a risk tolerance guide and should not be considered investment advice or advice to buy or sell any security. Please seek advice in consultation with a qualified investment professional before buying or selling any security.

Investing always involves some amount of risk. Risk can come in many forms, including market risk, interest rate risk, liquidity risk, inflation risk, and more. The basic tenet of investing is that a direct connection exists between risk and return. This is often described as the “risk/reward tradeoff.” In general, the higher the risk of loss, the higher your potential returns.