Risk Tolerance Profile
Risk Tolerance Profile
Investment Questionnaire
General Information
First, Last
Name
First, Last
Spouse’s Name
Street Address
Address
City
City
State
mm/dd/yyyy
Zip
State
Zip
Dependents
Birthday
No. of dependents
Business/Cell Phone
Home Phone
Business Phone
Home Phone
Investment Time Horizon
Time Horizon
1. In how many years will you begin taking consistent withdrawals from your portfolio?
0 pts
1 pt
3 pts
5 pts
10 pts
15 pts
15 pts
☐
☐
☐
☐
☐
☐
☐
A. Less than 1 year
B. 1 – 2 years
C. 3 – 5 years
D. 6 – 9 years
E. 10 – 15 years
F. 16 – 25 years
G. More than 25 years
2. Once you begin making withdrawals, how many years will you be withdrawing your money from the
account?
0 pts
0 pts
1 pt
3 pts
5 pts
8 pts
8 pts
☐
☐
☐
☐
☐
☐
☐
A. Lump sum or fully withdraw over a period of less than 1 year
B. Over a period of 1 – 2 years
C. Over a period of 3 – 5 years
D. Over a period of 6 – 9 years
E. Over a period of 10 – 15 years
F. Over a period of 16 – 25 years
G. More than 25 years
Total
TIME HORIZON TOTAL SUM OF QUESTIONS 1 - 2
Risk Tolerance
Risk / Return Tradeoff
3. Investment decisions are generally determined by a risk / return tradeoff. Risk is any possibility of loss to
the value of your portfolio. Return is the amount earned or profit on an investment. How would you
respond to the following statement?
Protecting my portfolio from loss is more important to me than achieving high returns?
0 pts
2 pts
5 pts
8 pts
10 pts
☐
☐
☐
☐
☐
A. Strongly Agree
B. Agree
C. Risk and Return are Equally Important
D. Disagree
E. Strongly Disagree
4. Riskier investments have the potential to experience higher long-term gains. Likewise, less risky
investments have less potential for high long-term gains.
With this in mind, which of the following statements is most consistent with your investment attitude?
8 pts
4 pts
0 pts
☐
☐
☐
A. I am willing to endure losses to maximize the chance of experiencing high long-term gains.
B. I am equally concerned with avoiding losses and experiencing long-term gains.
C. Avoiding losses is more important to me than experiencing long-term gains
5. Historically, investors who have received higher long- term returns have also experienced major changes
in the value of their investments. Higher returns come with a greater chance of loss
Conservative Investments
Lower Risk/Lower Return
Higher Risk/Higher Returns
Risky Investment
Which of the following statements best describes your investment philosophy?
0 pts
☐
A. I feel most comfortable with stable investments that generate consistent, but lower returns
year-to-year. I prefer to assume as little risk as possible.
3 pts
☐
B. I am willing to withstand some fluctuations in the value of my portfolio, but I prefer to be
invested in less risky investments that reduce the likelihood of large losses
7 pts
☐
C. I seek substantial investment returns and am willing to accept occasional short-term declines
associated with this strategy.
10 pts
☐
D. I seek potentially high investment returns and am willing to accept the higher risk of
potential losses associated with this strategy
Range of Returns
6. The following table shows the ending values
a $50,000 investment in four hypothetical
portfolios over a three-year period. The returns
for these portfolios may fall anywhere within
these ranges.
Which of the four hypothetical portfolios
would you feel most comfortable accepting?
0 pts
3 pts
6 pts
9 pts
☐
☐
☐
☐
VALUE OF $50,000 AFTER THREE YEARS
Portfolio
Worst Case
Value
Likely Value
Best Case
Value
Portfolio A
$42,000
$57,000
$70,000
Portfolio B
$39,000
$60,000
$78,000
Portfolio A
Portfolio C
$36,000
$62,000
$87,000
Portfolio B
Portfolio D
$31,000
$64,000
$97,000
Portfolio C
Portfolio D
Volatility
7. The degree to which the value of a portfolio rises and falls is called volatility. Generally, assets that exhibit
higher volatility also have higher returns. Investments are risky, however, because there is no guarantee
that the upturns in your portfolio will be greater than the downturns
Which of the following best describes how you feel about the amount of volatility you are willing to
accept?
10 pts
☐
A. Considerable – My main goal is to achieve higher returns over time and I can endure
substantial losses through intermittent periods in order to do so.
4 pts
☐
B. Some – I would like to achieve higher returns over time and can withstand an occasional,
large downturn in the value of my portfolio.
0 pts
☐
C. Little – I would rather have small returns than risk losing any money.
HIGHER RETURNS COME WITH INCREASED VOLATILITY
8. The table to the right shows three
hypothetical portfolios with their yearly
returns over a twenty year period
In which portfolio would you feel
most comfortable investing?
0 pts
4 pts
8 pts
☐
☐
☐

35% - 40%

30% - 35%

20% - 25%
Portfolio B
An average return of 6% with
three negative years and where
the majority of returns range
from -5% to 25% each year.


25% - 30%
Portfolio A
An average return of 5% with
one negative year and where
the majority of returns range
from 0% to 15% each year.
Portfolio C
An average return of 7% with
a wide range of positive and
negative returns.

40% +


15% - 20%



10% - 15%



5% - 10%



0% - 5%



(0% - 5%)


(5% - 10%)




(10% - 15%)
(15% - 20%

(20% - 25%)

(25% - 30%)

(30% - 35%)
Portfolio A
Portfolio B
Portfolio C
Each dot represents a single year of hypothetical market performance
Inflation
9. Over time, inflation can have a significantly negative impact on what your money can buy. By keeping
pace with inflation, investors can maintain their buying power over time.
Which of the following choices best reflects your attitude toward inflation and risk?
6 pts
☐
☐
☐
8 pts
☐
0 pts
2 pts
A. Although I may only keep pace with inflation, my main goal is to avoid loss.
B. While accepting a low level of risk, my main goal is to earn slightly more than inflation.
C. My main goal is to increase the value of my portfolio. Therefore, I am willing to accept
short-term losses associated with more aggressive investment options.
D. I am willing to endure large fluctuations in the value of my portfolio for the chance of
obtaining a higher return and beating inflation.
Loss Aversion
10. The table to the right shows risk and return
characteristics of three hypothetical portfolios.
With higher prospective annual returns, possible
losses also increase
In which portfolio would you want to invest?
10 pts
5 pts
0 pts
☐
☐
☐
Portfolio A
Portfolio B
Portfolio C
Portfolio
Most Likely
Annual Return
Possible Annual
Return
Portfolio A
Gain of 9%
Loss of 28%
Portfolio B
Gain of 7%
Loss of 19%
Portfolio C
Gain of 5%
Loss of 12%
11. I am comfortable with investments that may frequently experience large declines in value if there is a
potential for higher returns. These frequent and large declines may be experienced at an inopportune
time, such as at the end of the investment horizon.
0 pts
3 pts
7 pts
10 pts
☐
☐
☐
☐
A. Strongly Disagree
B. Disagree
C. Agree
D. Strongly Agree
12. Sometimes investment losses are prolonged and sometimes they are short-lived.
How might you respond when you experience Investment losses?
A. I would sell my investments immediately if they suffered substantial declines
4 pts
☐
☐
8 pts
☐
C. Even if my investment suffered a significant decline over several years, I would continue to
follow my long-term strategy and not adjust my portfolio
0 pts
B. Although declines in investment value make me uncomfortable, I would wait several
quarters or possibly one year before adjusting my portfolio.
Ability To Stay The Course
13. Most investments fluctuate over the short term. Suppose you invested $30,000 this year with the
intention of holding the investment for ten years.
If this investment lost value during the first year, at what value of your initial $30,000 investment
would you sell and move to a more stable investment?
0 pts
2 pts
4 pts
6 pts
9 pts
☐
☐
☐
☐
☐
A. $28,000
B. $27,000
C. $25,500
D. $24,00 or Less
E. I Would Not Sell
Total
RISK TOLERANCE TOTAL SUM OF QUESTIONS 3 – 13
Risk Tolerance Profile
Now that you have completed the Personal Investment Profile questionnaire, record your
Time Horizon Total and your Risk Tolerance Total in the tables below.
Total
TIME HORIZON TOTAL
Total
RISK TOLERANCE TOTAL
The scores above now provide us with the foundation from which to build your financial
plan. By matching your Time Horizon Total with your Risk Tolerance Total you can find the
appropriate asset allocation for your investment personality.
Risk Tolerance Total
Time Horizon Total
0–2
3
4–5
6–7
8+
3 – 10
Capital
Preservation
Plus
Capital
Preservation
Plus
Income
Plus
Income
Plus
Income
Plus
11 – 36
Capital
Preservation
Plus
Conservative
Growth
Conservative
Growth
Conservative
Growth
Conservative
Growth
37 – 64
Income
Plus
Conservative
Growth
Moderate
Growth
Moderate
Growth
Moderate
Growth
65 – 90
Income
Plus
Conservative
Growth
Moderate
Growth
Growth
Growth
91 – 100
Income
Plus
Conservative
Growth
Moderate
Growth
Growth
Aggressive
Growth
Do you agree with the results of this risk tolerance questionnaire?
☐Yes ☐No
If you do not agree with the portfolio allocation that your results suggest, please detail which
portfolio you believe would be more appropriate and WHY (type in the box below):
Enter Text Here
Signature: _________________________________________ Date: ____________________