dshort.com: Understanding Your Risk Tolerance

Understanding Your Risk Tolerance
November 22, 2009 update

Note: you only have about a week left to take advantage of free access to the FinaMetrica risk-tolerance test mentioned below. Don't miss out — the results may surprise you!

Last month I posted an item on one of the Motley Fool Rule Your Retirement discussion boards about a fascinating CNNMoney article entitled How much risk can you stand? The article elaborates upon four basic ideas:

You're more conservative than you believe.
Risk tolerance sets a limit on your stock allocation, not a target.
Your capacity for risk is different from your appetite for it.
Comfort with the risk you're taking doesn't mean you'll reach your goal.

The most useful feature in the article is a link to a free risk-tolerance test in questionnaire format from FinaMetrica. The test, which is based on extensive research, normally costs $30. But CNNMoney has arranged free access to it through November 30th via this risk-tolerance test link.

As regular visitors to this website know, I've been a frequent contributor to the Rule Your Retirement subscription service, and I routinely "stroll" the RYR discussion boards as TMFDoug.

Like many blogs, my dshort.com website has context-sensitive ads controlled by third parties. Rule Your Retirement is the exception. It has my full endorsement. If retirement planning is a topic you want to know more about, consider a 30-day free trial.