FREE RISK ASSESSMENT
Your financial needs and goals and the money you have available to meet these should determine how much investment risk you need to take and how much risk you can afford to take.
However, you and your financial adviser also need to understand your tolerance for risk, to strike the right balance between, at one extreme, endangering your financial well-being and, at the other, making the most of your opportunities, Gerda van der Linde, a director at the Institute of Behavioural Finance (IBF), says.
To help you determine your risk tolerance, the Financial Planning Institute and the IBF are offering you a free, scientific assessment of your personal risk tolerance during Financial Planning Week.
The assessment, provided by FinaMetrica, can be accessed at https://www.myrisktolerance.com/ fpweek/. You can discuss your assessment with your financial planner or a planner who is offering a free consultation during Financial Planning Week.
Van der Linde says your risk tolerance is a psychological factor with financial implications.
As with other aspects of personality, it is not easy to assess, she says. The FinaMetrica questionnaire tests risk tolerance in a scientific way to overcome the shortcomings of many other tests, she says.