Investing Unit 2: Investment Preferences - Financial Security for All

What are Your Investment Preferences?

Consider each pair of words below as a continuum. Place an “x” on each line of the continuum to indicate how important each of these features is to you. Marking the middle of a line would therefore mean that the features were of equal importance.

Low risk (Safety)	_____\|_____	High risk
Low rate of return	_____\|_____	High rate of return
Low capital growth	_____\|_____	High capital growth
High capital preservation	_____\|_____	Low capital preservation
Not very liquid	_____\|_____	Highly liquid
Shortterm maturity	_____\|_____	Longterm maturity
Taxable	_____\|_____	Taxexempt
No minimum investment	_____\|_____	High minimum investment
Low costs and fees	_____\|_____	High costs and fees
Little or no management required	_____\|_____	Much management required
Present income	_____\|_____	Capital growth
Conservative	_____\|_____	Aggressive

Figure 5. What are Your Investment Preferences?

Adapted from: Hogarth, Jeanne and Swanson, Josephine (1987). TOPICs, Investment basics, Cornell University, 1987.

The exercise above can be downloaded:

If others are sharing investment responsibility with you, ask them to complete it as well.

Review your responses carefully.
Check for inconsistencies in the preferences you have indicated. (For example, do you prefer things that are unlikely to come together, e.g., low risk and high return?)
Work to understand and resolve inconsistencies and differences in order to assure that your overall investment strategies and asset allocation are consistent with both your needs and your preferences.