The risk in your risk profile

Every investment website (and even some investment advisors) use questionnaires to help uncover the amount of risk you can take.

We all know:

• the way a question is worded has a lot to do with the way you answer it,
• your answers are heavily influenced by your current state of mind and circumstances,
• it is virtually impossible to measure something as dynamic, transitional, and fleeting as the emotions involving risk.

If you've taken used a questionnaire that asked how you would react to a 50% decline (and most did not because it was unimaginable before it happened), think about how you felt and reacted this year when it actually happened.

For those that are interested there's a nice article on the subject at moneytwatch.

If you need to measure, understand or position your portfolio for risk, contact us or visit our website.