Below is an overview of the possible investor types based on risk tolerance that result from the quiz. Risk tolerance can change over time and is only one factor to consider when you invest. You should also consider your overall portfolio, financial situation, investing experience, time horizon, and investment objectives.
Possible Investor Types Based on Risk Tolerance
Conservative investors want as little to do with risk as possible. Lower returns are ok because their first priority is to not lose money. Money may be needed soon, so investing conservatively may be a wise option.
Moderately Conservative Investor
Moderately conservative investors want to invest, but without taking large risks. Their priority is to not lose their investment, so lower returns are ok. Money may be needed soon, so investing somewhat conservatively may be a good option. They’re more moderate than a conservative investor.
Moderates take a balanced approach to investing. Short-term ups and downs are alright if it nets a higher return, but they are uncomfortable if the volatility lasts too long. Money will be needed, but not any time soon.
Moderately Aggressive Investor
Moderately aggressive investors want to be rewarded for taking risks. While not the most aggressive investor, they do tend to think that if they just hang in there, investments will pay off. Money may not be needed for a while, so they can ride out ups and downs.
When investing, the goal for aggressive investors is to maximize returns. Underperforming investments aren’t scary because they’re optimistic the markets will rebound over the long-term. After all, taking bigger risks is part of the process. Time is on their side and money may not be needed for quite a while.