0:00 – Intro
0:46 – Narrow down the choice
3:47 – What are your goals?
5:05 – What is your risk tolerance?
7:27 – Risk Questionnaire
Some example risk questions as mentioned in the video:
1. Imagine you have invested £100,000. Which of the five scenarios below would you want for your investment portfolio?
Best-case increase (£) Most likely result (£) Worst-case losses (£)
Scenario 1 13,000 3,000 –11,000
Scenario 2 15,500 4,000 –12,500
Scenario 3 20,000 5,000 –16,500
Scenario 4 24,500 6,000 –21,500
Scenario 5 28,000 6,500 –25,500
2. Investing involves a trade-off between risk and returns. In the past, investments with higher returns have been associated with greater risk and chance of loss. Whereas cautious investments that have had a lower chance of loss also have achieved lower returns. Which of the following statements best describes your attitude to risk?
– I am most concerned with risk. I am willing to accept lower returns in order to limit the risk of loss.
– I am willing to accept some risk and chance of loss in an effort to achieve modest but somewhat higher returns.
– I am willing to accept moderate risk in order to achieve higher returns. Reducing risk and increasing returns are equally important to me.
– I want to achieve strong returns on my investments. I am willing to accept somewhat higher risk and chance of loss.
– I am mainly concerned with getting the highest possible returns on my investments. I am willing to accept significant rises and falls in the value of my investments and a significant chance of loss.
Here’s the link to our ‘How to Pick Stocks’ Video mentioned at the end:
?ur Investing 101 series will cover the fundamentals of investing and will try to bring you the basics to build a solid foundation. Let us know in the comments for future topics you would like to see covered in these videos.
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At Trading 212 we provide an execution only service. This video should not be construed as investment advice. Investments can fall and rise. When investing, your capital is at risk.