Risk Profile Questionnaire
Know yourself before you invest
Your risk profile is the foundation of every investment decision. It determines your asset allocation, influences your expected returns, and defines how you'll experience market volatility. Yet many investors have never undergone a thorough risk assessment - or haven't updated one in years.
A comprehensive risk profile goes far beyond a simple questionnaire. It examines three distinct dimensions of risk that, taken together, paint a complete picture of how your portfolio should be structured.
The Three Dimensions of Risk
Risk Capacity (Ability)
An objective measure based on your financial situation - time horizon, income stability, net worth, and financial obligations. A 30-year-old with stable income has high risk capacity regardless of how they feel about volatility.
Risk Willingness (Attitude)
Your psychological comfort with investment volatility. How would you react to a 30% portfolio decline? Some investors sleep soundly through market crashes; others panic and sell at exactly the wrong time.
Risk Need (Required Return)
The return your portfolio must generate to meet your financial goals. If you need 7% annual returns to fund retirement, a conservative 3% portfolio won't get you there - regardless of your comfort level.
Key Questions to Evaluate Your Risk Profile
How many years until you need to access this money?
What percentage of your total net worth does this portfolio represent?
If your portfolio dropped 25% in one month, what would you do?
How stable is your primary income source over the next 5-10 years?
What annual return do you need to achieve your stated financial goals?
How much investment experience do you have with equities and bonds?
Do you have adequate emergency savings outside of your investment portfolio?
Are there large upcoming expenses (home purchase, education) that require liquidity?
From Risk Profile to Portfolio
Once your risk profile is established, it maps directly to an appropriate model portfolio allocation. Conservative profiles align with higher fixed income allocations, while aggressive profiles support higher equity weightings.
Your risk profile isn't static - it should be reassessed annually or after major life events (marriage, children, career change, inheritance). Learn more about how risk tolerance shapes your investment approach.
Discover Your True Risk Profile
Understanding your risk tolerance is the first step toward building a portfolio you can stick with through all market conditions.
Schedule a consultation for a comprehensive risk assessment and personalized portfolio recommendation.