Why does risk tolerance matter?

If you take too much risk, you might panic sell during a crash and lock in losses. If you take too little risk, inflation might eat your savings. Finding your 'sweet spot' ensures you stick to your plan long-term.

Does my risk tolerance change?

Yes. As you get older and closer to retirement, your ability to recover from losses decreases, so you should generally become more conservative. Life events like marriage or a new baby also lower risk tolerance.

What is Asset Allocation?

Asset allocation is dividing your money among different categories like stocks, bonds, and cash. It is the primary driver of your portfolio's returns and volatility.

Investment Risk Tolerance Quiz | Asset Allocation Test | Finmato

The "Sleep Well at Night" Factor

The best investment strategy isn't the one with the highest theoretical return—it's the one you can adhere to during a market crash. If your portfolio drops 30% and you panic-sell everything, you've failed. Our Risk Tolerance Quiz assesses both your financial ability to take risk (time horizon) and your psychological willingness to take risk (guts).

The 3 Main Investor Profiles

Most investors fall into one of three broad categories:

Conservative

Goal: Preservation of Capital.
Strategy: Mostly bonds, cash, and stable dividend stocks.
Vibe: "I'd rather earn less than lose anything."

Moderate

Goal: Balanced Growth.
Strategy: A 60/40 mix of stocks and bonds.
Vibe: "I want to grow my wealth but not ride a rollercoaster."

Aggressive

Goal: Maximum Appreciation.
Strategy: 80-100% stocks, including emerging markets.
Vibe: "I have 20 years to recover from any crash."

Time Horizon is Key

Your timeframe dictates your risk more than your feelings do.

Under 3 Years: You have ZERO risk tolerance. This money should be in cash or CDs. The market is too volatile for short-term goals (e.g., house down payment).
10+ Years: You have High risk capacity. Inflation is your biggest enemy effectively guarantees you will lose purchasing power if you stay in cash.

401(k) Setup

Starting a new job? Use your results to pick the right "Target Date Fund" or allocate your own mix of stock/bond funds.

Robo-Advisors

Platforms like Betterment ask these exact questions. Take our quiz first so you understand why they recommend a certain portfolio.

Marriage Review

Spouses often have different risk tolerances. Take the quiz separately and compare results to find a compromise for joint accounts.

Frequently Asked Questions

What is the "100 minus age" rule?

An old rule of thumb said "100 minus your age is the percentage of stocks you should own." (e.g., Age 30 = 70% stocks). Today, because people live longer, many suggest "110 minus age" or "120 minus age."

Can I be aggressive and conservative at the same time?

Yes! This is called "bucketing." You can be Conservative with your Emergency Fund (Cash) and Aggressive with your Retirement Fund (Stocks). Risk tolerance applies to specific goals, not just your whole life.

How do I rebalance?

If stocks go up, your 60/40 portfolio might become 70/30. This makes it riskier than you intended. You should sell some stocks and buy bonds to get back to your 60/40 target.

Educational Assessment Only

This quiz helps you understand general principles of asset allocation. It is not personalized investment advice. Past performance of asset classes does not guarantee future results.

Data Privacy

We do not store your answers. This assessment runs entirely in your browser.

Investment Risk Tolerance Quiz

1. What is your primary goal for this investment?

2. How long do you plan to keep this money invested?

3. If the market drops 20% in a month, what would you do?

4. How much experience do you have with investing?

5. Which scenario sounds best to you?