1. How much do you know about investments?
I do not know anything about how the stock markets move.
I know that stock markets move in cycles, and the ups and downs characterized by these movements are normal
I know enough to pick out even the short term trends and fluctuations of stock markets.
I know the historical background on the markets I invest in, and actively seek out information that may indicate future trends.
2. Which of these statements apply to you :
I am risk averse. I do not like to see my portfolio in negative territory. I don't mind that my investment returns are small (between 3% to 5% p.a.).
I have a moderate risk appetite. I am willing to see some fluctuation to my portfolio, but not too much. Overall, medium returns are good enough for me (between 5% to 7% p.a.)
High returns are important to me. I am willing to take higher risks for significantly higher returns over time (above 10% p.a.).
I think that I am good enough in investing such that I will do much better than most people. I expect returns of over 20% p.a.
3. To what extent does a stock market crash resulting in a large drop in your funds affect you?
I lay awake about it at night worrying that I may lose my investments and will consult my friends on what to do.
I worry about it and consult the experts. If they say sell, I will sell. If they say otherwise, I will then decide myself on what to do next.
I sell straight away as soon as I can to limit my losses. Any significant crash indicates that more is on the way.
I am not bothered in the least and view it as part of short term market fluctuations. I am a long term investor and this has no effect on my investment strategy on decisions.
4. If experts all say that it was a good time to buy into the market after it has sank 50%, what would your reaction be?
Curse them because I had bought in at the all time highs of the markets and there was no way I was going to lose more money buying more of the fund.
Consider their recommendations carefully and the overall market fundamentals and put some money into the fund if I agree with them. Whether I had lost money or made money in that stock market previously is irrelevant.
Give a yawn and turn away. I don't believe in what experts say. I would stick to just investing for the long haul and not try to time the market meanwhile.
Get all excited and put shift all my money into the fund mentioned. This is the opportunity for me to make it big!
5. How often do you go back and check the prices of the funds that you buy and what is your typical reaction every time you check?
I check every day and I always feel "Hmm, why hasn't the price moved?"
I check once a week or month and do not expect great jump in fund prices.
I check once a year when I am doing my annual review and am usually satisfied with the prices as they are within my expectations.
I will only look at them when I intend to sell off some of the funds (perhaps around retirement time, etc). In the meantime, I do not care how high or low they go nor do I have any interest in checking.
6. Given two hypothetical portfolio, how would you invest:
100% in portfolio 1
75% in portfolio 1 and 25% in portfolio 2
50% in portfolio 1 and 50% in portfolio 2
25% in portfolio 1 and 75% in portfolio 2
