Risk
Your risk tolerance
Risk tolerance, like investment strategy, is personal to you. Your own risk tolerance is not static but will change over time and will be dependent on your objective/time horizon. For example, you may well be prepared to take a higher risk with investments earmarked for retirement as these are generally the longest term investments that people have. When considering your different objectives, only you can decide whether relative stability with lower returns is more important than potentially larger returns but with greater volatility.
There are many ways to assess your risk tolerance; to help you consider the level of risk you are prepared to take SFS has produced a Questionnaire, which is designed to arrive at an initial indication of your risk tolerance. Having discussed and decided upon your objectives with your adviser, you can then start to explore the various solutions that may be available.
You should ensure that you are happy with the specific risks associated with any individual products recommended.
What does this mean?
So, investors are left with a difficult decision to make about just how to achieve the return that is acceptable to them. An additional complication is that you may not have the same risk tolerance for each of your investment objectives.
For example, you may be prepared to take a higher degree of risk when considering retirement planning, as you will generally have much more time for your plan to benefit from the longer-term potential associated with non-deposit based investments such as equities, gilts and property. On the other hand, a relatively short-term objective, saving for a car for example, may demand a more cautious approach.
Only you can decide just how much risk you are prepared to accept to achieve your individual financial objectives. However, your SFS adviser will help you identify the most appropriate solutions for you.
Your next step is to find out your attitude to Risk by taking our simple questionnaire. The results will be quickly calculated and you will be given useful information in association with your Risk v Reward profile.
Assess your attitude to risk - take our questionnaire
To find out more about any of
the services we’ve mentioned
simply:
- Contact your SFS Financial Adviser
- Call a member of our Client
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