Page 58 - Ready Set Retire

Stephen J. Kelley
If emotions are such a primal driver of our investing behavior,
how do we determine the optimum risk appropriate for
ourselves? There are several tools out there that do this; the
one we use is called Riskalyze. What Riskalyze does, through a
quick and easy survey, is determine your risk tolerance and
assigns it a number. Using Nobel Prize-winning technology, it
calculates an investor’s risk tolerance by using his or her actual
investment amounts and a six-month window. Through
questions centered on how much you can emotionally stand to
lose vs. potential gain, it can derive a surprisingly accurate risk
number. That process looks like this:

Once you have completed this exercise, we can upload your
portfolio and get its risk number, based on the same metrics
you use to derive your own. That looks like this:
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