Different investors have different risk tolerances. Much of the difference stems from the time horizon. That is, someone with a short investment time horizon is less able to withstand losses. The remainder of the difference is attributable to the individual’s appetite for risk. Volatility can be nerve-wracking for many people and they are more comfortable when they can avoid it. However, there is a definite relationship between risk and return. Investors need to recognize this risk/return trade-off. The following risk tolerance questionnaire has been designed to measure an individual’s ability (time horizon) and willingness (risk tolerance) to accept uncertainties in their investment’s performance. The total score recommends which of the five risk profiles is most appropriate for the investor.
 
First Name:
Last Name:
E-Mail Address:
 
Time Horizon
 
1. When do you expect to begin withdrawing money from your investment account?
Less than 1 year
1 to 2 years
3 to 4 years
5 to 7 years
8 to 10 years
11 years or more
 
2. Once you begin withdrawing money from your investment account, how long do you expect the withdrawals to last?
Less than 1 year
1 to 2 years
3 to 4 years
5 to 7 years
8 to 10 years
11 years or more
 
3. Inflation, the rise in prices over time, can erode your investment return. Long-term investors should be aware that, if portfolio returns are less than the inflation rate. their ability to purchase goods and services in the future might actually decline. However, portfolios with long-term returns that significantly exceed inflation are associated with a high-degree of risk.

Which of the following portfolios is most consistent with your investment philosophy?
 
Portfolio 1 will most likely exceed long-term inflation by a significant margin and has a high degree of risk
Portfolio 2 will most likely exceed long-term inflation by a moderate margin and has a high to moderate degree of risk
Portfolio 3 will most likely exceed long-term inflation by a small margin and has a moderate degree of risk
Portfolio 4 will most likely match long-term inflation and has a low degree of risk
 
4. Portfolios with the highest average returns also tend to have the highest chance of short-term losses. The table below provides the average dollar return of four hypothetical investments of $100,000 and the possibility of losing money (ending value of less than $100,000) over a one-year holding period. Please select the portfolio with which you are most comfortable.
 
Probabilities After
One Year 		Possible Average
Dollar Return 		Chances of
Losing Money
Portfolio A
$106,000 16%
Portfolio B
$107,000 21%
Portfolio C
$108,000 25%
Portfolio D
$109,000 28%
 
5. Investing involves a trade-off between risk and return. Historically, investors who have received high long-term average returns have experienced greater fluctuations in the value of their portfolio and more frequent short-term losses than have investors in more conservative investments.

Considering the above, which statement best describes your investment goals?
 
Protect the value of my account. In order to minimize the chance for loss, I am willing to accept the lower long-term returns provided by conservative investments.
Keep risk to a minimum while trying to achieve slightly higher returns than the returns provided by investments that are more conservative.
Balance moderate levels of risk with moderate levels of returns.
Maximize long-term investment returns. I am willing to accept large and sometimes dramatic fluctuations in the value of my investments.
 
6. Historically markets have experienced downturn, both short-term and prolonged, followed by market recoveries. Suppose you owned a well-diversified portfolio that fell by 20% (i.e. $1,000 initial investment would now be worth $800) over a short period, consistent with the overall market.

Assuming you still have 10 years until you begin withdrawals, how would
you react?
 
I would not change my portfolio
I would wait at least one year before changing to options that are more conservative.
I would wait at least three months before changing to options that are more conservative.
I would immediately change to options that are more conservative.
 

7. Portfolios with the highest average returns also tend to have the highest chance of short-term losses. The table below provides the average dollar return of four hypothetical investments of $100,000 and the possibility of losing money (ending value of less than $100,000) over a one-year holding period. Please select the portfolio with which you are most comfortable.

Which of these portfolios would you prefer to hold?

Portfolio A
Portfolio B
Portfolio C
Portfolio D

 
8. I am comfortable with investments that may frequently experience large declines in value if there is potential for higher returns.
Agree
Disagree
Strongly Disagree
 
Authorization: By checking this box I authorize Integrated Wealth Management, Inc. to update my file with the above listed information. I hereby verify that all info has been completed, reviewed and is correct.