Selecting the Proper Investment Allocation

The following questions are designed to determine an investment allocation that will help you meet your goals in a manner that you will be comfortable with. After answering these questions you should be able to determine an investment allocation that will suit your needs.
Circle the number that best matches you answer. Add the values to determine your score.
I. How long before you will need these dollars to achieve your goal?
1. Fewer than 3 years -1 point
2. More than 3 but less than 5 years – 3 points
3. More than 5 but less than 10 years – 6 points
4. More than 10 but less than 15 years – 9 points
5. Longer than 15 years – 11 point
II. Upon reaching that date, how many years will you want to withdraw money to achieve your goal?
1. More than 15 years – 11 points
2. More than 10 years but less than 15 years – 9 points
3. More than 5 years but less than 10 years – 6 points
4. More than 1 year but less than 5 years – 3 points
5. I want all of my money in one payment -1 point
III. What would you anticipate the future earning potential of your household?
1. Income will go up – 2 points
2. Income will remain constant – 4 points
3. Income will increase at a slow and steady pace – 7 points
4. There will be a rapid increase in our income – 9 points
IV. When you look at your other assets, the portion that is in fixed assets like, savings accounts, pensions, etc would equal what percentage?
1. 90% – 100% – 11 points
2. 70% – 89% – 9 points
3. 45% – 69% – 6 points
4. 21% – 44% 3 points
5. 0% – 20% – 1 point
V. Based on your comfort level, which investment goal sounds the most like you?
1. Greatly exceed inflation with higher risk levels – 9 points
2. Slightly above inflation with moderate risk – 7 points
3. Barely exceed inflation with low risk – 4 points
4. Keep up with inflation with little or no risk – 2 points
VI. Given the investment choices below, which mirrors your comfort level?
1. Avg. return 12% worst annual return -15% 9 points
2. Avg. return 10% worst annual return – 8% 7 points
3. Avg. return 8% worst annual return – 7% 4 points
4. Avg. return 6% worst annual return – 5% 2 points
VII. If you had the opportunity to receive better returns but had to take more risk you would?
1. Put all of your money at risk and take a lot more risk. – 9 points
2. Put some of your money at risk and take a lot more risk. – 7 points
3. Put all of your money at risk and take a little risk. – 4 points
4. Put some of your money at risk and take a little risk. – 2 points
VIII. For the most part higher potential gains equals higher potential losses. If you were given the following investment possibilities which would you most be comfortable with? Investing $100,000 for 5 years.
1. Option A Worse Case – $30,000 Best Case – $275,000 – 9 points
2. Option B Worse Case – $60,000 Best Case – $225,000 – 7 points
3. Option C Worse Case – $90,000 Best Case – $175,000 – 4 points
4. Option D Worse Case – $105,000 Best Case – $125,000 – 2 points
IX. Which description best matches your investment approach?
1. Stability of principal with little chance of losing my original investment. – 2 points
2. High income to achieve income needs with some risk. – 4 points
3. Growth with income and moderate risk. – 7 points
4. Capital appreciation with higher risk for long term growth. – 9 points
X. Which best describes your attitude towards the stock market?
1. I have never invested in the stock market – 1 point
2. If the stock market goes down I will sell. I am nervous – 3 points
3. I react to market swings I am uncomfortable – 6 points
4. I usually am willing to wait and see. I consider myself patient while being concerned – 9 points
5. Fearless, I’ m not concerned by short-term changes in the market.
XI. What would be the strongest reason to own bonds?
1. To diversify – 11 points
2. They provide some predictability – 9 points
3. They provide some steady income – 6 points
4. They provide safety of my principal – 3 points
5. I have never and don’t plan to ever own bonds – 1 point
Now total your score and enter the number _____________

Score range Profile Model
17 – 34 Conservative
35- 53 Moderately Conservative
54- 72 Balanced
73- 91 Aggressive
92 and above Very Aggressive

Model Allocations:
Conservative
6% international 10% High Yield Bonds
2% Small Cap 60% Bonds
2% Mid Cap 10% Cash / Cash Equivalents
8% Large Cap
2% Real Estate
Moderately Conservative
12% International 5% High Yield
3% Small Cap 55% Bonds
5% Mid Cap
17% Large Cap
3% Real Estate
Balanced
18% International 5% Real Estate
5% Small Cap 5% High Yield Bonds
7% Mid Cap 35% Bonds
25% Large Cap
Aggressive
24% International 5% High Yield Bonds
6% Small Cap 15% Bonds
10% Mid Cap
34% Large Cap
6% Real Estate

Very Aggressive

30% International
8% Small Cap
12% Mid Cap
42% Large Cap
8% Real Estate