Use this calculator to quickly determine your investor risk profile, including your investor type, investment focus and the corresponding income to equity investment ratio recommendation.
The investor risk calculator encompasses your current personal and financial situation; your investment objectives and risk tolerance; your investment knowledge and experience.
Investment success over the long term is directly related to your ability to tolerate and understand volatility in the short term. Achieving greater returns often means taking greater risk, which can lead to more volatility in the value of the investment. If you do not have a portfolio that you can live with during down markets, then you’ll be less likely to stay the course over the long run. That is why many of the questions we’ve included focus on your tolerance for risk.
An investor risk profile is important for determining a proper investment asset allocation for a portfolio. Your investor risk profile will identify the acceptable level of risk you are prepared to accept.
In general, a greater risk associated with any investment should require a greater return. Investors who want no risk to principal should not invest in individual stocks. Stocks may have attractive long-term gain potential, but investors must be willing to accept fluctuations in the market. Certificates of deposit (CDs) offer much lower returns, but the principal amount is guaranteed. Each investment has an appropriate risk level that can be measured using financial statistics.
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