Risk Tolerance Calculator
ET Online | Updated : May 18, 2018, 03.06 PM IST
An individual's risk profile is determined by a combination of factors. In many cases, the individual makes the wrong investment choices because he is not aware of his risk tolerance. The risk tolerance tool will help you take the right investment decisions that are in in line with your risk taking capacity.
The risk tolerance tool is based on a questionnaire that will assist you in finding out what type of investor you are. Just select the answer that you feel is right. Based on your risk profile, the tool will suggest a suitable asset allocation for you.
Why you should use the calculator
Are you a long-term investor? Are you a risk-taker? Or are you risk averse? Several studies in the past have proved about the existence of an inverse relationship between actual risk and perceived risk of an investor.
In order to avoid any spurious perceived risk, we recommend that you take our psychometric test which will gauge your risk profile in a scientific manner. This tool will also help you in narrowing down on your investment decisions. This test will also help you know which asset allocation best suits your profile.
How to use it
There are 13 questions with multiple choices to be answered. To find out one's risk profile, the tool will ask one question at a time and will give you multiple options to choose from. These questions include your age group, time horizon, existing risk profile, understanding of capital markets, your current asset allocation, and so on.
What it shows
Up on submitting all the queries, the result will show you the risk profile which can either one of the three: aggressive, moderate, or moderately conservative. Further, the ideal asset allocation mix between equity and debt will also be shown.