AXA Advisors’ Discovery Seminar

 

Standard Risk Tolerance Questionnaire

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Different investors have different risk tolerances. Much of the difference stems from time horizon. That is, someone with a short investment time horizon is less able to withstand losses. The remainder of the difference is attributable to the individual's appetite for risk.

Volatility can be nerve-wracking for many people, and they are more comfortable when they can avoid it. However, there is a definite relationship between risk and return. Investors need to recognize this risk/return trade-off.

The following risk tolerance questionnaire is designed to measure an individual's ability (time horizon) and willingness (risk aversion) to accept uncertainties in their investment's performance.

Please answer the following questions to help your advisor establish your current risk profile. Once it's completed, your advisor can use the outcome to recommend which of the available asset allocation models is most appropriate for you.

Answer Eight Key Questions

3 more sections to go
Time Horizon
1.

When do you expect to begin withdrawing money from your investment account?






2.

Once you begin withdrawing money from your investment account, how long do you expect the withdrawals to last?





2 more sections to go
Risk Aversion
3.

Which of these choices best reflects your attitude toward inflation and risk?

4.

The table to the right presents a potential best case result, probable result and potential worst case result of five sample portfolios over a one-year period with an initial $10,000 investment. Understanding the potential upsides and downsides of each portfolio, which portfolio would you prefer to hold?

 Potential Best Case Result ($)Probable Result ($)Potential Worst Case Result ($)
11,40710,4139,232
11,86310,4698,948
12,47310,5308,521
12,92310,5728,159
13,38710,6147,767
5.

Investing involves a trade-off between risk and return. Which statement best describes your investment goals?

6.

Historically, markets have experienced downturns, both short-term and prolonged, followed by market recoveries. Suppose you owned a well-diversified portfolio that fell by 20 over a short period, consistent with the overall market.

Example:

  • $10,000 initial investment would now be worth $8,000
  • $100,000 initial investment would now be worth $80,000

Assuming you still have 10 years until you begin withdrawals, how would you react?

7.

The graph to the right shows the hypothetical best and worst results of five sample portfolios over a one-year holding period. Note that the portfolio with the highest upside also has the largest downside. Which of these portfolios would you prefer to hold?

portfolio gains and losses



8. I am comfortable with investments that may frequently experience large declines in value if there is a potential for higher returns. Does this describe you?

Used with permission. © 2018 Morningstar Investment Management LLC.
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The Risk Tolerance Questionnaire presented is available through a license agreement between Morningstar Investment Management LLC and AXA Financial, Inc. Its sole purpose is to assist you in determining your general attitudes towards investment risk. This questionnaire does not consider all factors necessary in making an investment decision (e.g., personal and financial information and investment objective). In no way should this questionnaire be viewed as advice or establishing any kind of advisory relationship with Morningstar Investment Management. Morningstar Investment Management does not endorse and/or recommend any specific financial product that may be used in conjunction with the asset allocation models that are presented. Please consult with your Financial Professional and obtain the financial product's prospectus (or its equivalent) and read it carefully prior to investing. Morningstar Investment Management LLC is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The Morningstar name and logo are registered marks of Morningstar, Inc. Morningstar Investment Management is not affiliated with AXA and its family of companies.
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