Investment Risk Tolerance

To help determine your investment profile and risk tolerance, answer the following questions. Circle what seems to be the most appropriate response for each question. in most cases, there are no right or wrong answers.

1. In which age group do you fall?
   • 30 or under
   • 31 to 44
   • 45 to 54
   • 55 to 64
   • 65 or over
2. What is your investment time horizon - for how long can you leave your money to grow?
   • More than 20 years
   • 15 to 20 years
   • 10 to 14 years
   • 5 to 9 years
   • Under 5 years
3. For how long have you been investing in mutual funds or directly in stocks or bonds?
   • More than 10 years
   • 5 to 10 years
   • 3 or 4 years
   • 1 or 2 years
   • Less than one year
4. In which range does your annual household income fall?
   • More than SAR 300,000
   • SAR 200,000 to 300,000
   • SAR 100,000 to 200,000
   • SAR 50,000 to 100,000
   • Less than SAR 50,000
5. How many dependents do you have, including growing children and elderly parents who depend on your financial assistance?
   • None
   • 1
   • 2
   • 3 or 4
   • 5 or more
6. How do you expect your employment income will change over the next several years?
   • I anticipate a steadily growing income.
   • I expect a fairly leveled income.
   • I think it will fluctuate widely.
   • I anticipate my income will probably tend decrease.
   • I fear I might lose my job or I plan to retire.
7. Which statement best describes how you plan to add or take out money from your investment portfolio in the near future?
   • I expect to add a significant amount of cash regularly to my portfolio.
   • I think I can add only modest amounts of cash on an infrequent basis.
   • I do not plan to inject any more money to my portfolio but I don't anticipate making any withdrawals either.
   • I will withdraw modest sums from my portfolio on a regular basis to help meet living expenses.
   • I must take out sizable amounts of money from my portfolio regularly to meet my living expenses.
8. How would you describe your financial "cushion" to meet unexpected emergencies such as the replacement of a stolen vehicle and major planned expenditures such as down payment on a home?
   • More than adequate. I have more than enough cash in my money-market fund and other short-term investments to meet my needs. I may even carry more insurance than I require.
   • Adequate. I have ample liquid assets. I have enough insurance and my monthly obligations are manageable.
   • Borderline. I have a modest amount of cash and some insurance. But I may need to dip into my investments or borrow in an emergency.
   • Inadequate. My reserves are insufficient at the present time.
9. How important is a regular stream of investment income to you?
   • Unimportant. My goal is to build up a nest egg over the long term.
   • Somewhat important for peace of mind. I prefer a modest amount of income from my portfolio even though I don't really need it. It simply feels more comfortable holding investments that generate cash.
   • Important. Investment income helps make ends meet but I'm not totally dependent on it.
   • Highly important. Investment income provides for the majority of my needs. I want investments that produce cash on a highly predictable regular basis.
10. What's your attitude towards insurance?
    • I don't believe in having any more insurance than is absolutely necessary.
    • I have adequate coverage, but I buy policies with high deductibles to lower my premiums.
    • I have adequate insurance and my deductibles are low.
    • I stay well insured because I am highly adverse to suffering large losses. I spend more for policies with low deductibles because I want maximum coverage.
11. Which statement best describes your knowledge about investing?
    • Highly knowledgeable. I have a very good understanding about how the stock and bond markets work and I spend considerable time keeping up with financial happenings.
    • Somewhat knowledgeable. I have a fair comprehension of investing, but I'd like to know more.
    • Minimal knowledge. I don't know much about the financial world.
    • No knowledge. I know virtually nothing about investing and don't find the subject that interesting.
12. Which of the following statements best describes your investment experience?
    • Extensive. I have invested in a variety of vehicles including stocks, bonds, and mutual funds. I'm a do-it-yourself investor.
    • Average. I have some experience in mutual funds and stocks. I do my own research but sometimes use the advice of others.
    • Limited. I have invested in mutual funds and a few stocks, but my expertise is limited and I rely on a financial professional to guide me.
    • Slight. I mostly stick with savings vehicles such as certificates of deposit.
    • Virtually none. I'm new to the area of investing.
13. How would you react if your portfolio of stocks or stock funds plunged 30%?
    • I wouldn't be upset because I have a long time horizon and could use this as an opportunity to invest more at bargain prices.
    • I would be somewhat concerned because a 30% paper loss is substantial. Still, I wouldn't sell.
    • I wouldn't feel comfortable in this situation. i'm not sure what I would do.
    • I probably would sell before I lost even more money.
    • I wouldn't have invested in stocks in the first place bacuse I can't tolerate the risk.
14. Suppose you can invest SAR 50,000 in one of five portfolios with preset payoffs but you won't know your outcome until five years from now. The two payoffs are equally likely. Which pair do you prefer?
    • Payoff of SAR 250,000 or SAR 25,000
    • Payoff of SAR 150,000 or SAR 50,000
    • Payoff of SAR 120,000 or SAR 65,000
    • Payoff of SAR 100,000 or SAR 75,000
    • Payoff of SAR 85,000 or SAR 80,000
15. Which of the following statements best describes your investment philosophy?
    • I like to keep up with fast-moving investments day-to-day. These include options, futures, initial public offerings, and volatile mutual funds. I like to invest using borrowed money.
    • I expect my investments to "beat the market". Good fund managers should have no trouble outperforming market benchmarks such as the DOW Jones Industrial Average and I think I can do the same buying individual stocks.
    • I recognize that it's very difficult to beat the broad market indicator. I would be happy if my stock investments just matched the market over the long term.
    • My philosophy is to "play it safe" with money-market funds, high-quality bond funds, certificates of deposit, and individual bonds. Stocks are not for me.