Risk test
How much risk do you feel comfortable with? How much risk can you afford to take? Your appetite for risk will depend on your personal goals, life stage, lifestyle, timeline, and knowledge. Take this test to discover more about your personal risk tolerance, a key criteria in all investment decision-making.
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1.
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Your best friend says his uncle will give you a chance to invest in a gold property in northern BC.
He says the investment will more than double before the end of the year. What do you do?
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Listen, but remind yourself that a fool and his money are soon parted.
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Tell him to put you down for $1,000, an amount you can afford to write off.
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Find more information about the gold mining company. If it looks like it has good potential, invest $5,000.
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Take every last dime you’ve saved and buy as many shares as possible.
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2.
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Your boss is going to pay a year-end bonus and gives you a choice between $500 cash
or $600 in stock. You can’t sell the stock for at least 12 months, and in that time the stock price could go up
or down. What do you do?
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Grab the money while you can.
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Take the stock, because you believe in your company’s potential.
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3.
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A friend invites you to join a hockey pool to the tune of $20. You could win over $500.
What do you do?
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Say no thanks.
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Ask another friend to split the cost, since a $10 loss is better than a $20 loss.
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Make some educated guesses, and place your bet.
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Find out if you can purchase two pools to increase your odds of winning the jackpot.
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4.
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Your parents decide to give you an early inheritance of $10,000, asking that you invest
it wisely. What do you do?
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Buy a flashy used car and take the folks for a ride.
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Put the cash in a safe term deposit earning 4% interest a year.
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Invest it all in a high tech company just starting out with huge potential reward (and huge risk).
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Get a financial adviser to help you select several stocks, bonds and mutual funds that represent different risk levels.
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5.
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A stock you bought over a year ago has suddenly increased in value by over 40%. What do you do?
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Let it roll and keep things right where they are.
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Borrow money to buy more stock, certain it’ll keep going up.
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Sell, and move your cash to a low- or no-risk investment now that you’ve made a good profit.
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Questions & Answers
Spot the Red Flags