Understand Your Investment Risk Profile


Risk preference alone is often emotions-based and reflective of an individual’s tolerance for risk at a specific moment in time. Risk capacity is the amount of risk investors can actually take on, given their current life situation.

1)  Risk Capacity

How much risk the investor can or can not take given their current life situation – ability to take risk.

2)  Risk Preference

How much risk the investor is willing to take.

3)  Portfolio Risk

The portfolio risk score should fall between the risk preference and risk capacity scores.