Every investment made in the history of time has an element of risk associated with it. Heck, the whole concept of investing is trading risk for reward. If you lend money to the government of your country, it’s (most of the time) a pretty low risk investment, since governments hold the power to increase taxes if their finances go all to crap. Putting your money in the bank is similarly less risky, thanks to the guarantee given to deposits by the Federal Government. As the investments get riskier, so does the potential return, assuming everything works out.
But how do you determine what you should invest in? That’s where this quiz comes into play. After taking this risk tolerance quiz, you’ll be able to determine just how much risk you’re comfortable taking on. Some people are quite okay with potential losses, while others want to preserve capital at any cost. What part of the spectrum are you on? After the following 10 questions, you’ll find out.
Editor’s Note: This is not an official risk tolerance test. It is however, officially hilarious.
If you received $10,000 and you could only use it to invest, what would you put it into?
a) Into a high interest savings account. If I lost any money, I’d probably cry. I’m not even kidding.
b) Into bonds and very conservative stocks. I’m a little uptight, but I’m okay with it.
c) Into blue chip stocks with some small caps thrown in. I’m not scared of my own shadow.
d) Into developing markets and resource stocks. Chicks dig bad boys like me.
How do you feel about borrowing money and using it to invest?
a) I just wet my pants.
b) I don’t think I’d do that. It seems a little out there.
c) Sure, I’d think about that. But I’d probably be too lazy to really do it.
d) Oh hell yeah, I’d do that. Do you have any money I can borrow? Cause I’ll do it right now.
If you were asking a hot girl/guy out on a date, how would you go about doing it?
a) What does this have to do with investing?
b) I’d ask on the Facebook.
c) I’d probably ask in person, maybe after quantities of alcohol have been consumed.
d) I’d go to her work with flowers, chocolates and a teddy bear. If I’m gonna fail, I’m gonna fail spectacularly.
How would you describe your emotions when you lose money on an investment?
a) It would hurt less if I stabbed myself in the eye.
b) I think I might cry. LOOK AWAY!
c) It kinda sucks, but I’m not horrified by it.
d) I LOVE IT! NOW GIVE ME A BABY TO SHAKE!
How would your friends describe your risk tolerance at life in general?
a) I’ve been known to cry over spilled milk
b) I’ve been called a nervous Nellie more than once.
c) I’m not regularly called a wuss, but it has happened before.
d) My friends are actually a little scared of me. Why don’t they ever want to go skydiving?
If you were in the casino, where would you spend the majority of your time?
a) At the buffet.
b) Playing penny slots, never betting more than a nickel.
c) At the poker table, since you’re really just playing against other players rather than the casino.
d) Attempting to clone yourself, so you can play blackjack, roulette and craps all at once.
If the market fell 5% in one day, how would you react?
a) I’d sell all my stocks and hide under the bed with my teddy bear, probably in the fetal position.
b) I’d be thinking about selling at least some of my stocks, and switching up to bonds.
c) I’d be a little concerned, but stick to the long term plan. Maybe I’d even nibble and buy some more.
d) I’d borrow to buy more. Seriously, do you have any money I could borrow? STOP TEASING ME.
How well would you say you understand the world of investing?
a) Investing is stupid and I therefore refuse to learn anything about it.
b) I don’t know much, but luckily I have a smart friend who explains stuff to me.
c) I have a pretty good knowledge, but I’m still normal enough to not be all weird about it.
d) I live and breathe this stuff. It’s better than crack.
Who would you say is your investing hero?
a) My grandmother, with every cent she’s ever made in the bank.
b) Warren Buffett. The guy did well without using a hint of leverage.
c) Whoever the guy is who invented index funds.
d) Donald Trump. Sure, his company went bankrupt, but look at him now!
You’ve done well for yourself. What would you like to leave your heirs when you pass away?
a) Every nickel I’ve ever made, along with all my furniture, dishes and that plastic plant I bought.
b) A decent sized inheritance, knowing that I had a little fun before I kicked the bucket.
c) Enough money that it can help them, but enough left over for me to have a fun retirement.
d) Screw them. They can make their own money. Daddy’s spending it all.
Mostly A’s. You are a wuss. Try not to run away from your own shadow. Your friends are definitely making fun of you behind your back. Stick to conservative investments like government bonds and GICs.
Mostly B’s. You are still kind of a wuss, but less so than all the A’s. Feel free to add some high quality blue chip stocks to your portfolio, but don’t go nuts.
Mostly C’s. Congratulations, you’re a pretty balanced person. Nice work being not weird, weirdo. Go ahead and invest mostly in stocks, with a minimal amount of bonds thrown in.
Mostly D’s. Have you considered psychiatric help? Because you’re kind of scaring me right now. In the meantime, feel free to continue with the high risk stuff, possibly because I’m too scared to tell you otherwise.
How did you do on the quiz? Let us know in the comments.