The more risk you are willing to take with your investments, the higher your potential return - but the greater the chance of loss. Lower risk investments on the other hand offer greater security but lower potential returns.
Risk tolerance
Your risk tolerance will depend on your financial circumstances and goals. Financial risk tolerance can be split into two parts:
Risk capacity - the ability to take risk
This relates to their financial circumstances and your investment goals. Generally, with a higher level of wealth and income (relative to any liabilities) and a longer investment term, you will be able to take more risk, giving you a higher risk capacity.
Risk attitude - the willingness to take risk
Risk attitude has more to do with your psychological status than with your financial circumstances. Some will find the prospect of volatility in their investments and the chance of losses distressing to think about. Others will be more relaxed about those issues.
Our BETA Risk Profile Identifier
Our risk profile identifier helps you to measure your investment profile. Once you understand this, it is easier to see which investment options are more suitable for you. Accordingly, you could fall into one of the following categories.
1. Very Cautious Investors
2. Cautious Investors
3. Moderately Cautious Investors
4. Balanced Investors
5. Moderately Adventurous Investors
6. Adventurous Investors
7. Very Adventurous Investors
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Your Risk Profile Now
Your Risk Profile Now
