What Is An Investment Risk Profile
and How
Does It Work?
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Before you begin investing, you can evaluate your risk appetite
with a risk profile questionnaire.
A risk profile
questionnaire helps assess your risk profile to determine what
type of investor you are so that you can determine the types of
investments that are suitable for you, and which ones to avoid
based on your willingness and capacity to tolerate risk.
1. What is your investment
goal?
Different goals will need a different investment approach to be able to deliver the investment returns you seek to gain. For example, investing for your child's education fund over a 10-year horizon would involve a different strategy to planning for your retirement in 30 years' time.
2. How much time do you have?
After setting your sights on a goal, you will need to consider the time you have to invest (AKA your investing horizon). If you have 20 years to reach your goal, you may be able to take on higher risk to average out the losses and maximise the potential to make higher returns. However, if you only have 5 years, you may not have the time to wait for your investments to recover by the time you need the money.
3. How much risk can you live
with?
Imagine if you have 30 years ahead to manage your investments and have enough money set aside for emergencies and loan commitments. However, if the thought of losing money over your investment keeps you awake at night, then you should acknowledge that you are not comfortable with high risk investments.
Knowing your risk profile will help you assess your selection of
investments,
and here's how
Maybank Goal-Based Investment
on Maybank2u can help you. To know your risk profile, take a
simple quiz and see which of the below best describes you.
Your current risk profile is Type 1
Capital preservation is of primary importance to me. I am willing to accept investments with very low returns, in order to have minimal potential price fluctuation and potential losses in my investments.
Your current risk profile is Type 2
I prefer my investment return to be derived mainly from regular income along with some appreciation in asset value. I am willing to accept investments with low returns, in order to have low potential price fluctuation and potential losses in my investments.
Your current risk profile is Type 3
My investment goal is to achieve moderate levels of appreciation on my investments, and I prefer my returns to be derived from both regular income and appreciation in asset value. I am willing to accept investments with medium potential price fluctuation and potential losses.
Your current risk profile is Type 4
My investment goal is to achieve higher capital growth. I am prepared to accept investments with high potential price fluctuation and potential losses.
Your current risk profile is Type 5
My investment goal is to achieve the maximum possible return. I am prepared to accept investments with very high price fluctuation and potential losses, including the possibility of losing more than my original investment amount.
With a better understanding of your risk profile, you can get started with your first investment with Maybank Goal-Based Investment service which allows you to create and track investment goals, simulate investment outcomes and cultivate a habit of investing with automated monthly top-ups.
Depending on your risk profile, the simulator will recommend a suitable risk level for your goal, and shortlist Unit Trust funds that align to your overall investment needs. You can change your goal risk level or select funds with lower or higher risk rating. The simulator is only intended to kickstart your investment journey, your investment decision still lies with you.
You can easily estimate your risk profile with Maybank Goal-Based Investment.