Risk Tolerance Questionnaire - Morningstar, Inc. · PDF fileRisk Tolerance Questionnaire ... The return and risk for the portfolio are also given. 95k 135 175 215 255 1998 2000 2002
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Risk Tolerance Questionnaire
Tolerance for risk is a key consideration in determining your probable level of comfort with varying investing choices.
Risk Questionnaire
Time HorizonYour current situation and future incomeneeds.
1 What is your current age? Less than 4545 to 5556 to 6566 to 75Older than 75
2 When do you expect to start drawing income? Not for at least 20 yearsIn 10 to 20 yearsIn 5 to 10 yearsNot now, but within 5 yearsImmediately
Long-Term Goals and ExpectationsYour views of how an investment shouldperform over the long term.
3 What is your goal for this investment? To grow aggressivelyTo grow significantlyTo grow moderatelyTo grow with cautionTo avoid losing money
4 Assuming normal market conditions, what would you expect from thisinvestment over time?
To generally keep pace with the stock marketTo slightly trail the stock market, but make a good profitTo trail the stock market, but make a moderate profitTo have some stability, but make modest profitsTo have a high degree of stability, but make small profits
5 Suppose the stock market performs unusually poorly over the nextdecade, what would you expect from this investment?
To lose moneyTo make very little or nothingTo eke out a little gainTo make a modest gainTo be little affected by what happens in the stock market
6 Which of these statements would best describe your attitudes aboutthe next three years' performance of this investment?
I don't mind if I lose moneyI can tolerate a lossI can tolerate a small lossI'd have a hard time tolerating any lossesI need to see at least a little return
7 Which of these statements would best describe your attitudes aboutthe next three months' performance of this investment?
Who cares? One calendar quarter means nothing.I wouldn't worry about losses in that time frameIf I suffered a loss of greater than 10%, I'd get concernedI can only tolerate small short-term lossesI'd have a hard time accepting any losses
Tolerance for risk is a key consideration in determining your probable level of comfort with varying investing choices. Yourresponses to the questionnaire have been scored and then mapped to a mix of asset types listed in the chart below.
Risk Profile
This section indicates the risk level thatis considered appropriate for you andthe assets represented in this proposal.
Your risk tolerance is scored based onthree factors that impact investingdecisions: time horizon, long-term goalsand expectations, and short-term riskattitudes. This graph illustrates your risktolerance.
Risk Questionnaire
Time HorizonÕ
Aggressive
Long-Term Goalsand Expectations
ÕAggressive
Short-Term RiskAttitudes
ÕAggressive
Overall RiskTolerance
ÕAggressive
Very Conservative Conservative Moderate Aggressive Very Aggressive
Very Conservative As a very conservative investor, your portfolio will be invested in the most risk-averse areas such as cash and fixed-income securities. This approach offers a high degree of stability and should minimize the chances of substantial short-term volatility. Theoverall return, while not guaranteed, should fall within a narrow range of possibilities. However, particularly for time periods greater thanfive years, these returns may underperform the returns achievable from a higher-risk approach.
Conservative As a conservative investor, your portfolio will be invested primarily in risk-averse areas such as cash and fixed-incomesecurities with only a modest exposure to equities. This approach concentrates on stability rather than maximizing return and should limitthe chances of substantial short-term volatility. The overall return, while not guaranteed, should fall within a relatively narrow range ofpossibilities. However, particularly for time periods greater than five years, these returns may underperform the returns achievable from ahigher-risk approach.
Moderate As a moderate investor, your portfolio will include investment in equities, balanced by exposure to more risk-averse areas ofthe market such as cash, fixed-income securities, and real estate. This approach aims to achieve a balance between stability and returnbut is likely to involve at least some short-term volatility. The overall return is not guaranteed, although the range of possible outcomesshould not be extreme. In most circumstances, particularly for time periods greater than five years, these returns should outperform thereturns achievable from a more conservative approach but may underperform the returns achievable from a higher-risk approach.
Risk Questionnaire ×
Aggressive As an aggressive investor, your portfolio will be invested primarily in equities. This approach concentrates on achieving a goodoverall return on your investment while avoiding the most speculative areas of the market. Significant short-term fluctuations in value canbe expected. The eventual return for the time period over which you invest could fall within a relatively wide range of possibilities. In mostcircumstances, particularly for time periods greater than five years, these returns should outperform the returns achievable from a moreconservative approach.
Very Aggressive As a very aggressive investor, your portfolio will be invested in equities and will include exposure to more speculativeareas of the market. The aim is to maximize return while accepting the possibility of large short-term fluctuations in value and even thepossibility of longer-term losses. The eventual return for the time period over which you invest could fall within a wide range ofpossibilities. In most circumstances, the return should outperform the returns achievable from a more conservative approach.
The return behavior of individual securities often reflects the behavior of their investment category, or “asset class.”Determining an appropriate mix of asset classes is essential in creating a well-balanced investment strategy. This reportillustrates the proposed allocation for your portfolio at a broad asset class level and a detailed, sub-asset class level.
Broad Asset Allocation
This graph and table highlight theproposed allocation to broadly-definedasset classes.
This graph and table more preciselydefine the proposed allocation to assetclasses. The asset classes in this sectionare a subset of those broadly-defined inthe graph and table.
Asset Allocation %
Cash 0.00
US Large-Cap Value Stocks 16.32US Large-Core Stocks 14.96US Large-Cap Growth Stocks 16.32US Mid-Cap Stocks 10.20US Small-Cap Stocks 10.20Other US Stocks 0.00
Non-US Developed Stocks 12.75Non-US Emerging Stocks 4.25Other Non-US Stocks 0.00
This report demonstrates how money invested in the asset allocation shown in the Target Asset Allocation Report wouldhave performed over a long investing horizon and during two shorter-term periods of generally poor market performance.Please read the disclosures for important information on how these results were generated.
Long-Term Performance
This graph shows how $100,000 investedwould have performed over the past 15 years.The return and risk for the portfolio are alsogiven.
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Jul 1997-Jul 2012Asset MixS&P 500 TRBarclays US Agg Bond TR USD