This week, we wanted to provide our PRISM Academy students with a complete walkthrough of the Risk Tolerance Questionnaire. This way, you can get caught up, watch the below walkthrough and prepare your own worksheets before next week's PRISM Webinar on January 13, 2022 at 7:30 p.m. CST.
Reflect
Now that you've taken the time to fill out both sides of your worksheet, it's time to reflect on your results. In the video lesson, Jenna Brashear, AAII Community Manager, does a complete walkthrough of what her long-term goal of funding retirement looks like.
We delve into the two separate sections: Timing Horizons as well as Financial and Psychological Risk, then we scroll down to see our overall risk tolerance results. In the video lesson, you can see what the risk tolerance would be for a 26-year-old investing to fund their retirement. By listening to a real-world example of how to fill out and apply what you've learned to your own goals, we can use our risk tolerance results to our advantage during asset allocation.
This is an important time to reflect before we delve into allocation strategies in the next portion of Step 2.
Engage
In this lesson, we prompt you to answer these three questions reflecting on your own risk tolerance questionnaire answers.
- Were you surprised by your results? Whether you were surprised or not, tell us your initial reaction and why you felt the way that you did.
- Did you complete a worksheet for separate goals? If you had an aggressive risk tolerance with one of your goals and a conservative with another, what does this tell you about your allocation strategies?
- How do you choose your current asset allocation – do you consider your risk tolerance into building that strategy? With the answers you have now, will that strategy change?
LINK TO THE RISK ASSESSMENT QUESTIONNAIRE WORKSHEET------------------------------
Jenna Brashear
AAII Community Manager
Chicago, IL
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