Attitude To Risk

Investment is inseparable from risk. A balanced portfolio would therefore include investments from a range of risk profiles so that any unexpected event affecting one of them does not damage the whole portfolio. As a general rule, money that may be needed in the immediate future should be in a low risk environment for ready access, longer-term investments justify a higher level of risk.

Risk is closely linked with the potential for reward. Investors in shares can expect a better return on their money than they would get by simply depositing funds in a savings or deposit account. In these low risk accounts, you accept a low return in exchange for the low risk involved. If you take a risk, however small, you have the right to expect something in return, the more uncertain an investment is, the greater the potential return you expect in compensation.

1-2 CONSERVATIVE

You prefer not to invest in the Stock Market and are prepared to accept potentially lower returns from your investments where your capital is not at risk.

3-4 CAUTIOUS

You prefer not to invest directly in the Stock Market in the shorter term, but are prepared to accept a relatively low level of risk on investments over the longer-term, in order to achieve potentially higher returns.

5-6 BALANCED

You are prepared to invest in equity-based assets, where the risk is spread across a variety of investments and the fund is managed on your behalf, with the aim of achieving potentially higher returns.

7-8 ADVENTUROUS

You are happy to invest predominantly in equity based assets, where the risk is spread across a variety of investments (some of which might be “specialist” investments) and the fund is managed on your behalf, with the aim of potentially higher returns, accepting the increased risk of a loss to the value of your capital.

9-10 SPECULATIVE

You are happy to invest in individual equities, with the aim of producing potentially higher returns, accepting the increased risk of loss to the value of your capital.