Quiz: What is your risk tolerance?
Take this quiz to find out what kind of investor you are.
- Walking down the street in Las Vegas, you find a crisp $100 bill on the sidewalk right in front of the Bellagio. Since this isn’t an ethics quiz, what do you do?
- If one of your investments dropped 15 percent in three months, what would you do?
- Which of these statements describes your investing knowledge?
- How do you feel about the stock market?
- If you won $5,000 in the lottery, what would you do with the money?
- What are your goals for your investments?
On the investment highway you’re doing 35 miles per hour with your hazards on. Taking on the risk of some volatility will pay off and get you to your destination sooner rather than later. Sometimes you can be too safe, especially if you're young with plenty of years to recover from any market turbulence.
You’re doing the speed limit on the investment highway, but just about everyone is passing you by. A bona fide believer in the slow-and-steady philosophy, you want investments to outpace inflation and provide some income. This is appropriate if you are nearing retirement, but if you have 10 years or more, you might want to step on the gas a bit.
You drive in the middle lane on the investment highway because you’re not keeping pace with the speed demons, though you're passing up the slowpokes. Somewhat aggressive, you don't mind taking some risks as long as they are offset by more stable investments.
You drive in the left lane when it comes to packing your portfolio with aggressive investments. You like to take risks and feel confident about the research you put into investments. Thoughtful planning makes you ready to ride out whatever storms might hit the market. Just be careful not to put too much money in that hot stock.