How much risk am I willing to take?

Q1. The value of your investments can remain stable or go up or down. In general, those that fluctuated more have the potential to grow faster, but are riskier than those that are more stable. How much fluctuation are you willing to accept for your savings?

a) I do not want to experience any fall, even if it means my investments returns are relatively small.

b) I am willing to accept occasional falls so long as my savings are in sound, high-quality investments that can be expected to grow over time.

c) I will take substantial risks in exchange for significantly higher potential returns.

Q2. Some investments keep your money "safe", but do not earn enough to keep pace with inflation. (Consider what $100 would purchase 10 years ago & today.) Choose the statement that describes your investment savings goal most accurately.

a) My savings should be totally safe, even if it means my investment returns do not keep up with the inflation.

b) It is important that the value of my investments keep pace with the inflation. I am willing to risk an occasional fall in value of my original investment, or principal, so that my investments may grow at about the same rate as inflation over time.

c) It is important that my investments grow faster than inflation. I am willing to accept fair amount of risk to try & achieve this.

Q3. You know that your investments fluctuate over time, depending on market movements. What is the maximum loss of value you can stomach in any one-year period?

a) 0%              b) 5%              c) 10%             d) 20%             e) 30%
                                                                           

Q4. Consider 2 investments, A & B.
Investment A provides an average annual return of 5% with a minimal potential fall in value of the principal sum.
Investment B gives an average annual return of 10% but the value of principal sum may decline 20% or more in any year.
How would you invest your retirement savings in these 2 investments?

a) 100% in A, 0% in B            b) 75% in A, 25% in B        c) 50% in A, 50% in B      
                                                                                 

d) 25% in A, 75% in B            e) 0% in A, 100% in B                   
                                         

Q5. Of the 4 portfolios displayed in the chart below, which would you prefer to be your primary investment?risk.jpg (25455 bytes)

a) Portfolio A       b) Portfolio B          c) Portfolio C            d) Portfolio D
                                                                            

source: CPF Investment Risk Profile Test

Name Email Age

The above risk profile test is found in CPF Investment Scheme information booklet
Kenny Teo Keng Guan
HP: 97863360  ktang@pacific.net.sg