Your Risk Tolerance in the Market

Matching investor EXPECTATIONS with Reality!


The key innovation of Riskalyze is based on the work of the 2002 Nobel Prize in Economics winning behavioral psychologist Daniel Kahneman, whose “Prospect Theory”** showed that people often do not make decisions solely to maximize economic utility. People in thought experiments will often give up a free benefit in order to deny others from getting a greater benefit if it seems unfair. Many hate losing more than they like winning. We’re complicated, emotional creatures, especially when it comes to money.  

Aaron Klein (company cofounder) says that risk tolerance is often misunderstood. “It’s not how scared of risk an investor is,” he observes. “It’s how far one’s portfolio falls before they capitulate. This kind of decision making often causes people to sell low and sit out the recovery.”

Historically, investors’ risk tolerance was determined mostly through age-based stereotypes, gut instinct and surprisingly subjective questions such as “Do you get a thrill out of investing?” and “If your investment were a car, what kind it would be?” Klein and his team set out to develop a more quantifiable assessment using questions such as “Suppose you had $100,000 to invest. Would you prefer an assured gain of $10k or risk losing $30k for the chance to gain $50k?” Those surveys, along with beefed-up analysis tools for assessing an investment’s actual risk, were baked into a software platform that indexes both investor risk tolerance and investment product riskiness on a “one to a hundred” scale. Using this tool, advisors are frequently surprised at how misaligned peoples’ portfolios are with their appetites for risk.



Would you like to know the facts about the TRUE level of risk you and your spouse have in your portfolios?

  1. Would that be a better measure of your future retirement income risk than someone’s opinion?
  2. Would you sleep better knowing this important piece of your retirement planning was not left to chance?
  3. If you answered “Yes” to any of the above questions then commit to your next step.

Understanding YOUR Risk Tolerance is a critical step on your way to a true “Peace of Mind” retirement plan.  Less worry when your 85 is a GOOD thing!

Get a FREE Portfolio Risk Analysis.  Does your risk level match the risk level or your current investments?  

Call us at 979-820-4281 today or start by taking the quick Risk Number Quiz above.

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