What type of investor are you?
The first step in determining what type of investor you are is to gauge your risk tolerance. Then you can focus on your approach to investing.
Risk tolerance
Which of these descriptions best represents your comfort level with risk? The numbers below provide a visual gauge of your risk tolerance, from 1 being the lowest level to 5 being the highest.
If you think …
- The ups and downs that come from investing in the stock market will keep you awake at night, no matter how long your investment time horizon.
- Bonds and short-term investments may be better for you than stocks because they're typically less volatile.
Then your risk tolerance is probably …
One or two on a scale of one to five
Conservative
If you think …
- Some (but not too many) market fluctuations are tolerable.
- A mix of stocks and bonds could be the way to go, because you plan on being invested for at least five years.
Then your risk tolerance is probably …
Three on a scale of one to five
Moderate
If you think …
- You won't worry about the ups and downs that come from investing in the stock market.
- The potential for higher returns outweighs the risk of losing money.
- A portfolio that holds more stocks than bonds is okay.
Then your risk tolerance is probably …
Four or five on a scale of one to five
Aggressive
Investment strategy
To help determine the investment approach you should take, decide which of these quotes sounds most like you.
"Managing my investments is time-consuming. I'd like some help."
Age-based options may be the right approach for you when saving for higher education.
You pick 1 of the 3 age-based options depending on your risk comfort level. Then, as your child approaches college age, we'll automatically shift your savings to more conservative portfolios. Of course, it's good to periodically review your investments in case your risk tolerance or personal situation changes.
"I like to choose my investments and control how they're managed."
Individual portfolios could be the right approach for you.
This is a do-it-yourself strategy. You can choose from our lineup of 13 individual portfolios. You then manage that mix based on the strategy you put together. It’s good to periodically review your investments if your savings horizon changes, or if there are changes to your risk tolerance or personal situation.
