Investment Temperament Quiz

On each row, click the button next to the statement that best describes you.

Selecting Your Personal Investing Temperament Daredevil Explorer Researcher Preserver If I believe an investment has a chance of really paying off big, I'm willing to take the chance that I could lose a large part (maybe even all) of my money. I'm willing to take a greater-than-average amount of risk in return for the possibility of having my portfolio grow substantially. I'm fairly conservative, but am willing to take a greater-than-average amount of risk with part of my portfolio in order to boost its growth potential. I'm very conservative, and am much more concerned about protecting what I already have than in taking risks to make it grow. I can accept losses in the value of my investments, even if they continue for several years. The end result is all that really matters! I can accept an occasional year where I lose money on my investments, but I wouldn't like it if I had two of them back-to-back. I can handle the month-to-month ups and downs of investing, but I wouldn't want to end up losing any money for the entire year. It's important to my peace of mind to have stable, consistent year-to-year results. I almost always prefer to make my investing decisions on my own. I occasionally make my investing decisions all on my own, but usually I prefer to let my broker bring me what he thinks are his best ideas. I prefer to make my own investing decisions, but am open to ideas from the "experts" which I search out in magazines, books, etc. Making investing decisions all on my own makes me a little nervous. I tend to rely a lot on others to help me. The amount of current income I receive from an investment is not a factor in my decision making. It would be desirable to receive some current income from my investments, but I don't insist upon it in every case. It's fairly important that I receive current income from my investments, but I'm willing to accept some uncertainty as to the amount. The amount of current income I receive from an investment is important; if possible, I'd like to know the amount in advance. Inflation is the number one threat. I think it's essential that you beat inflation, and that means you don't have the luxury of playing it safe all the time. Inflation is a genuine concern, so I'm willing to invest where there's a good chance of getting a "real" return even though there's a little more risk. Inflation is a genuine concern, but gains lower than the rate of inflation are acceptable if it means I can keep my risk down. Preserving my capital and knowing how much current income I'll receive are much more important to me than beating inflation. I've had great results on a few high-risk situations. Of course, I've had my share of big losers, too. To really make money, you've got to risk money. I think exploring new financial territory is exciting. When I hear about the latest "hot" investment area, I like to take a look. I want to make my decisions based on a solid understanding of all the facts. I don't believe in investing in something just because everyone else is doing it. News about such things as the savings and loan closings, our trade deficits, or the losses in "junk bonds" are a little scary and confusing. For me to risk 10% of my net worth in an investment that seemed to have a 90% chance of success, the potential profit would have to be at least equal to the amount I put at risk. For me to risk 10% of my net worth in an investment that seemed to have a 90% chance of success, the potential profit would have to be at least twice as much as the amount I put at risk. For me to risk 10% of my net worth in an investment that seemed to have a 90% chance of success, the potential profit would have to be at least four times as much as the amount I put at risk. No amount of potential profit is worth risking the loss of 10% of my net worth. I suppose I'm optimistic (and a tad impulsive at times), but I don't usually worry about my investment decisions once they're made. I don't have time to bury myself in the details like some people. I keep my ear to the ground and think I have pretty good intuitive insights. Once I make a decision, I have a lot of confidence in it, which enables me to stay with it even if others around me are changing their minds. Making investment decisions is hard for me; I'm never quite sure I have all the facts. I wish I could be sure what the best investments are for me. It's important to me, perhaps even a source of pride, that my portfolio does better than the stock market over the course of an economic cycle. I do tend to compare the results in my portfolio with what the overall stock market did. It's a good feeling to know that you "beat" the market. I keep an eye on what the overall stock market is doing during the year. Naturally, I'd like to do even better, but it's not a major factor in my thinking. It's irrelevant to me whether my portfolio does better than the stock market over the course of an economic cycle. If a stock doubled in price a year after I bought it, I'd buy some more shares in that company. If a stock doubled in price a year after I bought it, I'd hold on and hope for still more gains. If a stock doubled in price a year after I bought it, I'd sell half my shares and lock in part of my profits. If a stock doubled in price a year after I bought it, I'd sell all my shares.

Now, look back and see which column has the most buttons marked. Are you primarily a Daredevil or an Explorer? A Researcher or a Preserver?

Most people have little trouble seeing themselves in one of the four profiles. If you're on the borderline between two, choose the more conservative one (e.g., the Researcher is more conservative that the Explorer, the Preserver is more conservative than the Researcher). You'll be able to fine-tune your use of this temperament indicator later in the investment decision-making process.