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Building Your Investment Basis

A risk profile recognizes the adequate level of risk an individual is prepared and able to accept. A corporation's risk profile attempts to determine how a willingness to take risk (or repugnance to risk) will affect an overall decision-making strategy.

Risk profiles is created in a number of ways, but usually begin with a risk profile questionnaire. All risk profile questionnaires score an individual's answers to various inquiring questions to come up with a risk profile, which is later used by used by financial advisors, both human and virtual, to help contour an individual's portfolio Asset allocation. This asset allocation will reliably concerned the risk in the portfolio, so it is important that it aligns well with the individual's risk profile.

An investor makes investments in order to accomplish assured financial goals. A risk profile helps an investor understand how much risk they can take vs how much risk they should take to achieve their goals.



Determining Your Investment Goal

There are various risk profiling tools that are available online and you can use them to get your risk assessment done. Upon completion you will be put into one of the risk containers depending on your responses to the given questions (e.g. low risk taker, medium risk taker and high risk taker). Once you know your risk profile you can concluded what kind of investor you are, what kind of returns you should expect from your investment portfolio and what kind of investment portfolio you should have.

Level of financial risk that an investor can manage contentedly based on his/her life situation (e.g. risk competence will be higher for a young salaried investor vs a middle aged man with two children). Investor's Adviser Objectives to understand where they are headed and their current resources to identify risks they may be required to take up to attain assured goals (e.g. invest in equities to plan for retirement).

  •      a) Under 35
  •      b) 36-45
  •      c) 46-55
  •      d) 56-60
  •      e) Above 60
  •      a) None
  •      b) Between 1-3
  •      c) 4+



  •      a) Less than 1 lac
  •      b) 1 to 5 lacs
  •      c) 5 to 10 lacs
  •      d) 10 to 25 lacs
  •      e) More than 25 lacs









  •      a) Very unstable
  •      b) Unstable
  •      c) Somewhat stable
  •      d) Stable
  •      e) Very Stable
  •      a) Do not have
  •      b) Less than 1 month income
  •      c) 1 to 3 months income
  •      d) 3 to 6 months income
  •      e) More than 6 months income
  •      a) Salary
  •      b) Business
  •      c) Profession
  •      d) Rental
  •      e) Others



  •      a) None
  •      b) Between 0% - 20%
  •      c) Between 20% - 35%
  •      d) Between 35% - 50%
  •      e) > 50%



  •      a) 2 Wheeler, 4 Wheeler, Commercial Vehicle
  •      b) House : Own / rented
  •      c) Others, please specify



  •      a) Up to two years
  •      b) Two and three years
  •      c) Three and five years
  •      d) Five years and Ten years
  •      e) > Ten years and more
  •      a) I am a novice. I don’t understand the markets at all.
  •      b) I have basic understanding of investing. I understand the risks and basic investment concepts like diversification.
  •      c) I have an amateur interest in investing. I have invested earlier on my own. I understand how markets fluctuate and the pros and cons of different investment classes.
  •      d) I am an experienced investor. I have invested in different markets and understand different investment strategies. I have my own investment philosophy.

  •      a) Less than 3 years
  •      b) 3 to 5 years
  •      c) More than 5 years



  •      a) Capital Appreciation
  •      b) Regular Income
  •      c) Capital Appreciation and Regular Income



  •      a) Less than 1 lac
  •      b) 1 to 2 lacs
  •      c) 2 to 5 lacs
  •      d) 5 to 10 lacs
  •      e) More than 10 lacs


  •      a) Less than 1 lac
  •      b) 1 to 2 lacs
  •      c) 2 to 5 lacs
  •      d) 5 to 10 lacs
  •      e) 10 to 25 lacs
  •      f) More than 25 lacs
  •      a) I cannot consider any Loss
  •      b) I can consider Loss of 4% if the possible Gains are of 10%
  •      c) I can consider Loss of 8% if the possible Gains are of 22%
  •      d) I can consider Loss of 14% if the possible Gains are of 30%
  •      e) I can consider Loss of 25% if the possible Gains are of 50%
  •      a) Preferably guaranteed returns
  •      b) Stable, reliable returns
  •      c) Some variability in returns
  •      d) Moderate variability in returns
  •      e) Unstable, but potentially higher returns
  •      a) Investment A -1 % 15 %
  •      b) Investment B -5 % 20 %
  •      c) Investment C -10 % 25 %
  •      d) Investment D -15 % 30 %
  •      e) Investment E -20 % 40 %
  •      e) Investment F -25 % 50 %