Take the Risk Tolerance Quiz

Recently a bunch of finance-related websites have offered quizzes where you can determine your investment risk tolerance. These sites often inquire about ones age, income, family matters and how would you react to specific market events.

Most people might consider themselves calm and rational buy-and-hold investors, which would give them a rating of a moderate to high risk tolerance. This is especially true if you consider market declines as a buying opportunity.

Having said that, an imaginary 40% stock market plunge versus actually living through one often represents 2 very different situations. Judging by the large sell-off and long projected recovery, it doesn’t look like people are all that risk tolerant, but are more risk averse at this point.

Since real-life events are likely to change how people perceive themselves, risk-tolerance measures that aren’t money-specific could offer a better quiz to take. From an investor point of view, the goal of completing a risk assessment quiz should be to find out how one would actually act during the type of recession we’re going through. Otherwise what’s the point of taking the quiz?

You can try a fairly good financial personality quiz and see if your results change as the economy improves.