Your Financial Risk Tolerance

The following brief survey will serve as a starting point for determining your tolerance for financial and investment risk. In developing your financial plan, your risk tolerance is one of the most critical variables. This is primarily due to the fact that common stocks have more risk - in the sense that principal loss is a distinct possibility in a given year - but also have over the years had a substantially greater return than bonds and cash. They have also proven to be the best hedge against inflation in the long run. Your risk tolerance also has a direct bearing on the amount of insurance coverage you will want to obtain. Respond to the 12 statements in the left column. If you haven't experienced the situation described, respond as if you faced it today.
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