Risk Profile | Summit Wealth

What do you believe your investment risk profile is?

In terms of your experience with stocks and bonds (or stock and bond mutual funds), how do you consider yourself as an investor?

What types of changes have you made in your investment portfolio in the last five years?

1- Nearly always toward less risky investments

2- Mostly towards less risky investments

3- No changes or no clear direction with regard to risk

4- Mostly toward more risky investments

5- Nearly always toward more risky investments

Assume that you own $500,000 of financial assets. Then assume that you have the opportunity to make an investment of $20,000 of your assets into a portfolio that has the following chances of gains and losses. Which of these chances would you take?

1. An even (50-50) chance of gaining $2,000 or not gaining or losing anything

2. A 70% chance of gaining $5,000 and a 30% chance of losing $5,000

3. A 65% chance of gaining $10,000 and a 35% chance of losing $10,000

4. A 60% chance of gaining $15,000 and a 40% chance of losing $15,000

5. A 55% chance of gaining an additional $20,000 and a 45% chance of losing $20,000 (the whole investment)

Assume the same chances and investment ($20,000) as above, but now assume that your total financial assets are $200,000. Which of the chances would you select?

1. An even (50-50) chance of gaining $2,000 or not gaining or losing anything

2. A 70% chance of gaining $5,000 and a 30% chance of losing $5,000

3. A 65% chance of gaining $10,000 and a 35% chance of losing $10,000

4. A 60% chance of gaining $15,000 and a 40% chance of losing $15,000

5. A 55% chance of gaining an additional $20,000 and a 45% chance of losing $20,000 (the whole investment)

When making an investment decision where the investment might generate substantial losses as well as substantial gains,

1. I focus on the potential loss almost exclusively.

2. I focus on the potential loss mainly.

3. I focus on the potential loss and the potential gain about equally.

4. I focus on the potential gain mainly.

5. I focus on the potential gain almost exclusively.

When a personal financial decision turns out to be a disappointment,

1. I almost always feel guilty and rotten, as if it is a personal failure.

2. I mainly feel that it is a personal failure.

3. I sometimes feel that it is a personal failure and sometimes that it is just a setback.

4. I mainly feel that it is just a setback.

5. I almost always feel that it is just a setback.

Suppose that your portfolio of stocks or stock mutual funds suffered a 10% loss over three months while the general stock market was flat over the same period.

1. I would be very concerned and would quickly shift my portfolio toward less risky investments.

2. I would be concerned and would wait for the portfolio to recover and then shift more of my portfolio allocation to less risky investments.

3. I would wait it out and perhaps reevaluate my portfolio in a few months.

4. I would wait it out and would do nothing that I wouldn’t have done anyway.

5. I would look to buy more stocks or stock mutual funds at the depressed price.

Below shows the range of returns for five different portfolios over a one-year period (e.g., portfolio 3 shows an average annual return of 10% with a range of returns from 24% to – 7%). Given this information, in which portfolio would you choose to invest?

1. Average: 3% Best Case: 6% Worst Case: 0%

2. Average: 5% Best Case: 10% Worst Case: -2%

3. Average: 8% Best Case: 13% Worst Case: -7%

4. Average: 10% Best Case: 20% Worst Case: -14%

5. Average: 14% Best Case: 30% Worst Case: -30%

Consider your financial situation (your job outlook, and your ability to pay your bills and live a satisfactory life). What degree of confidence do you have that your situation is secure?

SUMMIT GROUP

Personal Risk Profile