The financial markets in 2018 experienced lots of ups and downs we haven't seen in a long time. How do you stay focused on your goals when the markets get volatile? Take this short quiz to uncover your feelings about investing.
- When do you plan to stop working?
- 40 years or more
- 20 years
- 10 years or less
- When the stock market drops 10% or more, how do you feel?
- I pay no attention.
- I become a little concerned, but generally stick to my investment game plan.
- I freak out.
- How often do you check your retirement account balance?
- Once a year
- Three or four times a year
- Every day
- Which of the following statements captures your feelings about losing money in the short run?
- Markets go up and down every day. Over longer timeframes, their historic tendency has been to rise.
- I check to see if my asset allocation is significantly out of balance, but generally don’t do anything about it. Markets eventually recover.
- I feel sick, and want to sell everything.
- What’s the most important factor when thinking about risk and reward in your retirement plan?
- It’s time in the market, and not timing the market, that counts.
- I accept risk as a normal part of investing. Without some level of acceptable risk, I cannot expect to get a reasonable return.
- The risk of losing money in the markets is intolerable to me.
Score your answers
Give yourself 20 points for each answer “a”; 15 points for every “b” and 5 points for each answer “c”. Total your score.
80 to 100 points (Green light): You are comfortable with maintaining your long-term investment strategy through volatile markets.
40 to 79 points (Yellow light): The risk of loss is somewhat concerning to you, whether that’s because you are getting closer to retirement age or feel anxious when markets go down. Think about resetting your asset allocation to be more conservative.
20 to 39 points (Red light): The risk of losing money is weighing heavily on you. Spend some time to understand how stocks, bonds and cash investments have performed historically, and consider working with a financial advisor who is sensitive to your feelings and who may be able to suggest investment products that seek to limit losses.
The scores are based on generally accepted investment principles and are not intended as investment advice or recommendations.
There is no guarantee that a particular investment strategy or asset allocation will meet your objective.
Additional factors should be considered as part of a comprehensive review of your individual financial situation.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.