Mutual Fund Investor Profile Quiz     Return    

Mutual Fund Investor Profile Quiz
We recognize that each person approaches his or her investment decisions from a unique perspective. A mutual fund that is perfect for someone else may be totally inappropriate for you due to factors such as:

  • How much risk you are comfortable taking
  • Your age and the number of years you have before retirement
  • Your income level and tax rate
  • Your other existing investments and personal net worth
  • Preconceived expectations about investment performance

The following quiz will help you quantify your tolerance for risk based on your own personal life situation. As you read through each question, circle the letter next to the single answer that you feel most accurately describes your current position. Keep in mind that there are no "correct" answers to this quiz, only answers that are helpful in assessing your investment style. So don’t worry about how your answer might be perceived by others; just try to be as honest and accurate as possible.

Then at the end of the quiz, use the point totals listed on the right side of the page to compute your overall test score. Once you’ve added up your total points, refer to the corresponding mutual fund investor profile for an evaluation of your personal risk tolerance.


1. I am currently investing in mutual funds to pay for: Points Your Score
  a.   Retirement 0 pts  
  b. College 0 pts  
  c. A house 0 pts  
2. I expect I will need to liquidate some or all of my funds in:    
  a. 2 years or less 0 pts  
  b. 2 to 5 years 5 pts  
  c. 5 to 10 years 8 pts  
  d. 10 years or more 10 pts  
3. My age group is:    
  a. Under 30 10 pts  
  b. 30 to 44 9 pts  
  c. 45 to 60 7 pts  
  d. 60 to 74 5 pts  
  e. 75 and older 1 pts  
4. I am currently looking to invest money through:    
  a. An IRA or other tax-deferred account 0 pts  
  b. A fully taxable account 0 pts  
5. I have a cash reserve equal to 3 to 6 months expenses.    
  a. Yes 10 pts  
  b. No 1 pts  
6. My primary source of income is:    
  a. Salary and other earnings from my primary occupation 7 pts  
  b. Earnings from my investment portfolio 5 pts  
  c. Retirement pension and/or Social Security 3 pts  
7. I will need regular income from this fund now or in the near future.    
  a. Yes 6 pts  
  b. No 10 pts  
8. Over the long run, I expect this mutual fund to average returns of:    
  a. 8% annually or less 0 pts  
  b. 8% to 12% annually 6 pts  
  c. 12% to 15% annually 8 pts  
  d. 15% to 20% annually 10 pts  
  e. Over 20% annually 18 pts  
9. The worst loss I would be comfortable accepting on my fund is:    
  a. Less than 5%. Stability of principal is very important to me. 1 pts  
  b. 5% to 10%. Modest periodic declines are acceptable. 3 pts  
  c. 10% to 15%. I understand that there may be losses in the short run but over the long term, higher risk investments will offer highest returns. 8 pts  
  d. Over 15%. You don't get high returns without taking risk. I'm looking for maximum capital gains and understand that my funds can substantially decline. 15 pts  
10. If the stock market were to suddenly decline by 15%, which of the following would most likely be your reaction?    
  a. I should have left the market long ago, at the first sign of trouble. 3 pts  
  b. I should have substantially exited the stock market by now to limit my exposure. 5 pts  
  c. I’m still in the stock market but I’ve got my finger on the trigger. 7 pts  
  d. I’m staying fully invested so I’ll be ready for the next bull market. 10 pts  
11. The best defense against a bear market is:    
  a. A defensive market timing system that avoids large losses. 4 pts  
  b. A potent offense that will make big gains in the next bull market. 10 pts  
12. The best strategy to employ during bear markets is:    
  a. Move to cash. It's the only safe hiding place. 5 pts  
  b. Short the market and try to make a profit as it declines. 10 pts  
  c. Wait it out because the market will eventually recover. 8 pts  
13. I would classify myself as:    
  a. A buy-and-hold investor who rides out all the peaks and valleys. 10 pts  
  b. A market timer who wants to capture the major bull markets. 7 pts  
  c. A market timer who wants to avoid the major bear markets. 5 pts  
14. My attitude regarding trading activity is:    
  a. Active trading is costly and unproductive. 0 pts  
  b. I don't mind frequent trades as long as I’m making money. 2 pts  
  c. Occasional trading is okay but too much activity is not good. 1 pts  
15. If the S&P 500 advanced strongly over the last 12 months, my investment should have:    
  a. Grown even more than the market. 10 pts  
  b. Approximated the performance of the broad market. 5 pts  
  c. Focused on reducing the risk of loss in a bear market, even if it meant giving up some upside potential in the bull market. 2 pts  
16.
I have experience (extensive, some, or none) with the following types of investments. extensive some none
a. U.S. stocks or stock mutual funds 2 pts 1 pts 0 pts
b. International stock funds 2 pts 1 pts 0 pts
c. Bonds or bond funds 1 pts 0 pts 0 pts
d. Futures and/or options 5 pts 3 pts 0 pts
e. Managed futures or funds 3 pts 1 pts 0 pts
f. Real estate 2 pts 1 pts 0 pts
g. Private hedge funds 3 pts 1 pts 0 pts
h. Privately managed accounts 2 pts 1 pts 0 pts
 
17. Excluding my primary residence, this investment represents ___% of my investment holdings.    
  a. Less than 5% 10 pts  
  b. 5% to 10% 7 pts  
  c. 10% to 20% 5 pts  
  d. 20% to 30% 3 pts  
  e. 30% or more 1 pts  
TOTAL  


RISK PROFILES

After you’ve totaled your score on the Mutual Fund Investor Profile Quiz, compare your score to the ranges listed below for an objective assessment of your individual risk tolerance.
Under 58 pts Very Conservative. You appear to be very risk averse with capital preservation as your primary goal. As such, most equity mutual funds may be a little too risky for your taste, especially in a turbulent market environment. We would recommend you stick to the safest bond funds and money market mutual funds where your income stream is predictable and more secure.
58 to 77 pts Conservative. Based on your responses, it appears that you are more concerned about minimizing the risk to your principal than you are about maximizing your returns. Don’t worry, there are plenty of good mutual funds that offer strong returns with very little volatility. As a starting point, you should probably first consider asset allocation funds and balanced funds. Watch out though, some funds in these categories can still carry more risk than you would be comfortable with.
78 to 108 pts Moderate. You are prepared to take on a little added risk in order to enhance your investment returns. This is probably the most common approach to mutual fund investing. To select a mutual fund matching your style, we recommend you start by looking at growth funds and funds with some international exposure. Be careful, however, not to take on too much risk or you’ll be kicking yourself at the next market downturn.
109 to 129 pts Aggressive. You appear to be ready to ride out almost any financial storm on your way toward maximizing your investment returns. You understand that the only way to make large returns on your investments is by taking on added risk, and your personal situation seems to allow for that approach. As such, some of the more aggressive growth funds and international funds are probably your best bets.
Over 129 pts Very Aggressive. Based on your responses, you appear to be leaning heavily toward speculation. Your primary concern is maximizing your investment growth, and you seem prepared to take on as much risk as necessary in order to do so. That being said, very aggressive growth funds and hot sector funds (e.g., technology or communications) will probably appeal to you most. These have historically been highly speculative investments that could provide superior results if you can stomach the volatility and uncertainty.