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What kind of investor are you?

By Scott Culver
Communications Specialist
WEA Trust

May 2006

Are you a conservative or an aggressive investor? The WEA Trust’s new risk assessment tool at weatrust.com/calculators is available to help you find out. It uses responses to 13 questions to determine what type of investor you are by assessing your tolerance to risk. Once you understand your risk tolerance, you can choose a mix of investments appropriate for your situation.

Assessing risk tolerance

Before you consider any investment, it is important to determine how much risk you’re willing to take. Risk can be defined as the possibility of losing all or part of your investment.

Investment professionals generally accept the notion that the potential for higher returns goes hand in hand with higher risk. Conversely, low-risk investments are associated with lower returns. Naturally, you would like to get the highest possible return on your investments, but the appropriate allocation of your money depends on your risk tolerance.

When should I take a risk assessment? Those new to investing should begin with a risk assessment. The risk assessment will match your risk tolerance to an investment allocation that best fits your situation.

However, this tool is not just for the beginner. As you move into different stages of life, your circumstances may cause your risk tolerance to change. Younger people tend to look at riskier investments with the potential for higher rates of return, while those in mid-career or approaching retirement may feel the need for more nest- egg protection.

Our risk assessment tool

Your risk assessment results are based on your answers to questions about objectives and goals, timeline for using the money, current life situation, investment experience, and style.
The risk assessment tool will tell you what kind of an investor you are. It will suggest an appropriate asset allocation for your profile, identifying what percentage you might allocate to fixed income, small-cap, mid-cap, large-cap, and international/global investments.

Online allocation worksheet

After completing the assessment, you can apply your risk profile to our online allocation worksheet. The suggested risk allocation for your profile will automatically transfer to the worksheet and help you create a portfolio of Trust investments that is right for you.

You may use the assigned percentages, apply your own, or select an alternative profile to adjust the percentages. You can choose mutual funds in each category and designate how much of your allocation you wish to invest in each. Fund names are electronically linked to a Morningstar analysis of those funds.

Completing the worksheet does not enroll you in the Trust program, but you can print it for future reference as you enroll or make changes to your existing account.

You can enroll online at weatrust.com or call 1-800-279-4030 to request an enrollment kit.

Posted May 10, 2006

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