Risk profiling Assessment Questions
Risk Profiling is all about ‘TCG’ - Tolerance, Capacity & Goals ! You do not require multiple Questions to assess a Risk Category but few real answers will help you achieve the most appropriate Risk category and also help you define the most suitable investment product for you
Q:1 About your Risk Tolerance : How will you feel when you get to see your portfolio value down by around 20% in short span of time or event, during your investment journey ? { Max Score 10}
I will never like to see this as Capital preservation is my key objective (3 Marks)
I know volatility is the part of Investment journey , still I will feel bad for such deep fall (5 Marks)
I know volatility is the part of Investment journey , hence I will wait for it to normalise over a period of time (8 Marks)
I know volatility is the part of Investment journey. I will try to capture the advantage of such downside through additional purcases or regular SIPs (10 Marks)
Q:2 About your Risk Capacity : Please define your Income Source or Type { Max Score 10}
I am living on Annuity or Pension or Retirement Funds (3 Marks)
I have adhoc Income like- Housewife, dependents etc (5 Marks)
I have a stable Income - my Retirement is within next 10 Years (8 Marks)
I have a stable Income - my Retirement is after next 10 Years ( 10 Marks)
Q:3 About your Investment Goals : Please define your Primary Investment Objectives { Max Score 10}
To get Annuity or SWP or Monthly Income form my Investments (3 Marks)
To create a corpus for my dated and unavoidable Goals like- Kids education, Retirements etc (5 Marks)
To create a corpus for my undated and avoidable Goals like- Vacation, CAR, Home Rennovation etc (8 Marks)
To beat Inflation and build wealth through long term investing like- in 5 to 10 Years or more (10 Marks)
Risk Assigment Scoring :
Conservative Investor : Total Score to be equal to 9
Moderate Investor : Total Score to be between 9 to 15 like 10, 11 etc
Aggressive Investor : Total Score to be between 15 to 24 like 16, 17 etc
Very Aggressive Investor : Total Score to be between 24 and above like 25, 26 etc
Definition of each of these Risk Categories :
A Conservative Investor primarily focuses on:
Capital preservation
Stability of investments
Predictable returns
Protection from market volatility
Such investors are generally uncomfortable with sharp market fluctuations and may feel stressed during periods of market correction. Their investment decisions are usually driven by safety and regular income requirements rather than aggressive wealth creation.
Retired individuals
Pension-dependent investors
Senior citizens
Investors with low risk appetite like ffluent Investor who is not greedy for growth etc
Investors with short-term or income-oriented needs
Short duration Debt-oriented products
Conservative hybrid funds
SWP-oriented investments
Fixed Deposit, Government Bonds etc
Unsuitable products : Any Equity Products
Short to Medium Term
A Moderate Investor understands that market volatility is part of investing but prefers balanced risk exposure. Such investors seek a mix of:
Stability
Moderate growth
Reasonable inflation protection
They are willing to accept limited short-term fluctuations for achieving medium-term financial goals.
Salaried professionals nearing retirement
Family-oriented investors
Goal-based investors
Investors seeking balanced wealth creation
Hybrid funds
Balanced advantage funds
Large-cap oriented equity exposure
Asset allocation strategies
Medium to Long Term
Unsuitable Products : High weightage in Equity or any Lock In Investments
An Aggressive Investor is comfortable with market volatility and understands that temporary market declines are part of long-term wealth creation. Such investors are growth-oriented and willing to stay invested during market corrections.
Their primary objective is:
Long-term wealth accumulation
Inflation beating returns
Higher portfolio growth potential
Young professionals
Business owners
Long-term investors
Investors with stable income and long earning horizon
Diversified equity funds
Flexi-cap funds
Mid-cap allocation
SIP-driven investing
Goal-based long-term investing
Long Term (5 Years & Above)
Unsuitable Products : Sectoral, Small Cap or Credit Risk funds
A Very Aggressive Investor has a very high tolerance for market volatility and often views market corrections as investment opportunities. Such investors actively focus on maximizing long-term wealth creation and are comfortable with temporary portfolio declines in pursuit of superior returns.
They generally:
Invest aggressively during downturns
Prefer high-growth opportunities
Focus strongly on long-term capital appreciation
Experienced investors
Entrepreneurs
High income professionals
Investors with long investment horizon
Wealth creation focused individuals
Equity-heavy portfolios
Mid-cap & small-cap allocation
Sectoral/thematic exposure (where suitable)
Long-term SIP/STP strategies
Tactical allocation opportunities
Long Term (7–10 Years or More)
Unsuitable Products : None
Risk profiling is indicative in nature and should be reviewed periodically based on:
Changes in income
Financial responsibilities
Investment horizon
Market behaviour
Life stage changes
The final investment recommendation should always consider the investor’s complete financial profile, goals, liquidity needs, and suitability requirements.