WHAT TYPE OF INVESTOR ARE YOU?

Are you a defensive, middle-of-theroad or aggressive investor? The answer to this question will partly determine where you invest.

If you go to a reputable independent financial adviser, they should carry out a “fact find”, asking detailed questions about all your personal and financial circumstances, to work out whether you should play it safe or take a risk.

Alternatively, you could do a very basic online check for free in a couple of minutes at sites such as CalcXML.

The answers will reflect a host of factors such as your age, how long you are investing for, what investments you already have, whether you want growth or income, and when you want your money.

Steven Downey at Holborn Assets says a quick way to calculate your own attitude towards risk is to ask yourself: “How much would I have to lose in my portfolio before I freak out? If that number is 10 per cent then you are conservative, but if it is 50 to 60 per cent than you have a high risk tolerance.”

A cautious, defensive investor might have around a quarter of their portfolio in stocks or funds to give it a little pep, but spread the remainder across lower risk asset classes, mostly government and corporate bonds, and possibly also property funds and gold.

A medium-risk investor might want around half their portfolio in stocks or funds, 40 per cent in government and corporate bonds and 10 per cent in property funds or gold.

Young, aggressive investors with time on their side might want as much as 80 per cent of their longterm savings in shares or funds, and 10 per cent in bonds and 10 per cent in alternatives including

property funds.