Finding the Risk Limit on Your Investments
Most Risk Tolerance Questionnaires ask simple, non-mathematical questions, like:
- How long until you need this money?
- Are you Conservative, Moderate or Aggressive with this account?
- Capture your definition of "financial devastation"
- Express a range of acceptable returns within your portfolio
- Outline some ways to diversify away added risk in your holdings
- Manage expectations across your accounts