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Risk -- and how well you handle it -- will determine
your investment philosophy. Choose the category that best describes you
as an investor. Consider the investment period to be long term (five years
or more).
Conservative Investor
- I want my money safe at all times, and I don't
want to lose any of it.
- Any decline in the value of my investment concerns
me.
- I am satisfied with an investment that stays
ahead of inflation.
- I'm uncomfortable with price volatility.
- I want to minimize losses and fluctuation in
the value of my investments.
- I'd invest in something safe that offers a
fixed rate of return.
- I'm willing to give up higher rates of return
in order to keep most of my principal intact.
- I prefer investments that offer income opportunities
without much exposure to principal loss.
Moderate Investor
- I want my investment return to beat inflation
by at least 2 percent.
- I select investments that have a moderate amount
of volatility yet offer the opportunity for rates of return higher than
certificates of deposit or government bonds.
- Although a decline in the value of my investments
concerns me, I can accept temporary market volatility in return for
growth opportunities.
- I would like to increase the value of my investment
moderately, with limited exposure to risk.
- I want a balanced investment mix and am willing
to put up with some short-term fluctuation in value.
Maximum Return Investor
- I like to pursue substantial appreciation opportunities,
even though it puts my capital at high risk.
- Temporary market fluctuations do not concern
me because maximum appreciation is my primary long-term goal.
- I expect a return greater than the S&P 500
from my investments.
- I am financially able to accept some limited
liquidity in my investment portfolio.
- I'll take calculated risks in order to ensure
a potential for the highest return over time.
- I have the conviction necessary to hold on
to my investment during those years when it could drop in value by 25
percent or more.
Use the Determine Your Risk Tolerance
worksheet to determine your comfort with risk or market volatility.
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