Judge your risk appetite :: Business Line

Risk profiling is usually the starting point of making investment decisions and arriving at the desired asset allocation that is suitable for you.

Fincart’s risk profiling tool (http://www.fincart.com/financial-tools/risk-profiler.php) is a platform that lets you quickly assess your risk propensity. This it does by soliciting answers from you for a few simple questions. The tool evaluates you based on the answers and the time horizon of your investments.

testing your familiarity

The platform quizzes you on information such as your familiarity with investment markets and whether you need access to the funds during the term of the investment. Besides, it also has some behavioural questions. For these, you can choose how you would react to a particular situation from a drop-down menu.

For example, to answer how you would react if your investment drops in value from Rs 1,000 to Rs 850, you can select among four options that range from buying more to moving to cash. Based on the responses, the tool classifies you as belonging to one of five risk profiles – defensive, conservative, balanced, growth or aggressive.

Free service

The tool is free for use, without any registration requirements or the need for any personal information. You can also call FinCart for a free advisory service to avail different asset allocation choices for your risk profile.

However, if the tool directly offered some asset allocation guidelines, it would add more value. Also, while the profile is only a guideline, it may be helpful if the tool also considers the investor’s age when assessing

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