How can I tell my investment risk tolerance?

Risk—and how well you handle it—should help determine your investment decisions. For a personalized risk tolerance score, visit the Rutgers Cooperative Extension “Investment Risk Tolerance Quiz” Web site at:

Below are three categories of investors and some characteristics that describe them:

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 an investment that I own concerns me.

• I’m uncomfortable with price volatility (i.e., changes in investment share prices).

• I want to minimize losses and fluctuation in the value of my investments.

• I like to 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 provide regular income 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 investments moderately with limited exposure to risk, and I am willing to ride out market downturns.

• I want a balanced investment mix and am willing to put up with some short-term fluctuation in value.

Aggressive Investor

• I like 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 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

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