There’s somebody who can tell you which type of mutual fund to invest in. And that person is no other than you yourself. That’s because which fund suits you depends on what kind of an investor you are. Answer these questions to find this out.
1. Assuming that the extent of loss and gain from an investment is equal, which of the following is most acceptable to you?
a. 5% loss or gain
b. 10% loss or gain
c. 20% loss or gain
d. 30% loss or gain
2. A few weeks after you invest in a fund, the markets crash and the value of your investment dips by 20%. What do you do?
a. Exit the fund
b. Sell part of it
c. Do nothing
d. Invest more
3. When you invest, what is your most important concern?
a. Safe even if investment doesn’t grow
b. Investment is able to beat inflation
c. Moderate returns at moderate risk
d. High profits even if investment risky
4. A company in which you lost money has made a turnaround and is coming out with a public issue. What would you do?
a. Not invest in the company again
b. Track shares for possible investment
c. Buy shares only after the public issue
d. Invest in the public issue
5. You invest Rs 50,000 in a mutual fund. Two months later, you unexpectedly need the money. What would you do?
a. Redeem investment in full
b. Redeem part of investment
c. Take advance from employer
d. Take a personal loan
6. A few months after you start an SIP the markets turn bearish. What do you do?
a. Withdraw the entire investment
b. Remain invested, but end the SIP
c. Continue investing as planned
d. Increase the SIP amount
7. How frequently do you track your investment portfolio?
a. Every day
b. Once in 15-20 days
c. Once in 2-3 months
d. Once in more than six months
8. What is the basic objective of your investment?
a. Meet day to day expenses
b. Supplement income
c. Buying an asset
d. Retirement planning
9. How soon do you need the money you plan to invest?
a. In 6-7 months
b. In 12-15 months
c. In two-three years
d. After more than five years
10. How much of your monthly income is available for investment?
a. Less than 10%
b. 10-20%
c. 20-50%
d. Over 50%
Give yourself points on the following basis:
a. 1 point
b. 2 points
c. 3 points
d. 4 points
Scorecard
10-15 points
You are conservative and uncomfortable with the slightest risk. Your investment tenure and financial requirements don’t allow you to take too much risk.
16-24 points
You are moderate and willing to take a little risk. This is also because you have a longer investment tenure and more stable financial condition.
25-34 points
You are moderately aggressive and little extra risk does not bother you if returns are attractive. Your tenure is medium to long-term.
35-40 points
Very aggressive, you are more than willing to take risks. Your long-term tenure and comfortable finances mean you don’t need investments for income.
