The most important number for any investor to know is not the level of the S&P 500 or the yield on the 10-year Treasury or any other number related to the financial markets. Instead, to invest comfortably and productively through bull and bear markets alike, an investor must know his or her own personal Risk Number.
The following 90-second video explains Riskalyze, a new technology we are using to help investors find their Risk Number.
Your Risk Number, calculated using a proprietary algorithm from financial technology company Riskalyze, is a number on a scale of 1 to 99 that defines how much risk you are willing to take to earn investment returns. For example, someone with a Risk Number of 15 is a very conservative investor who is seeking a lower level of portfolio risk along with a lower rate of return. Someone with a Risk Number of 89, however, is a very aggressive investor willing to take on significant portfolio risk to earn higher returns.
It is critically important for investors to invest in a way that is both comfortable and appropriate for them—thus, to invest according to their own personal risk tolerance. If you don’t, one of two bad things can happen!
. . . on the other hand . . .
You can find your unique Risk Number by answering a short series of questions that pinpoint where you stand on the risk-reward spectrum.
Are you a 32 or an 84? Find your Personal Risk Number in three minutes, with this short quiz:
Once you know your Risk Number, you can compare it to the Risk Number of your actual portfolio to determine if you are taking the appropriate amount of investment risk. Many people consistently take more risk in their investments than they should, which is why so many sell out at the bottom of the market. As a courtesy, if you take the Risk Questionnaire we would be pleased to determine the actual Risk Number of your investment portfolio.
If you have any questions about how we use Riskalyze to craft portfolios that match the risk/reward levels of our clients, please email us at firstname.lastname@example.org or call us at 858-246-6855.