March 24, 2015 Fact of the Day: What is the risk tolerance of Affluent investors?
DID YOU KNOW THAT….. fourteen percent of investors with more than $25 million define their risk tolerance as very aggressive compared to only 2-3 percent of households with less wealth?
The largest percentages of investors define their risk tolerance as “Moderate”. About 53 percent of those with $25 million or more are moderate, 57 percent of those with $5 to $25 million, 61 percent of those with $1-5 million and 54 percent of those with $100,000 to $1 million. A Moderate person is one who “seeks moderate returns but is willing to place a limited portion of their investments at risk.”
In contrast, only 11 percent of the $25 million plus, 12 percent of those with $5 to 25 million, and15 percent of those with $1 to $5 million define themselves as “Conservative”. Interestingly, 24 percent of those with $100,000 to $1 million also consider themselves to be Conservative.
Let’s face it. The amount of risk you are willing to take is based upon a lot of factors…..your age, your family situation, your job. Those who have a lot of money…..are more likely to be aggressive because they can afford to lose more.
If you would like to discuss your risk tolerance and figure out what is right for you….based on your family situation….check out our Best Advisors.