What is a Risk Number?

Investing involves a trade-off. To pursue the growth we need, we must be willing to accept some short-term risk. Your Risk Number helps to specifically identify how much risk you are willing to take.
A company called Riskalyze calculates your risk number based on a short questionnaire. It takes five minutes or less to complete. Their process uses a Nobel Prize winning academic framework.
Nobody likes to see their account values go down. But, we know from experience some assets, like stocks, experience temporary setbacks. And sometimes, those setbacks can be extreme. Your Risk Number identifies a specific point where the decrease becomes too uncomfortable.


How is it different from what we’ve always done?

In the past, we asked our clients general questions. “Do you see yourself as conservative, moderate or aggressive?” And we categorized our clients as such. We didn’t have a good tool to measure this, until now.  We believe this will give us a better understanding of how you feel about the investing process.

How do we use your Risk Number?

Riskalyze pinpoints your Risk Number. But it also tells us what the Risk Number is for your entire portfolio. Let’s say for example, your risk number is 58, but your portfolio scores 72. We can then make adjustments to your asset allocation.

What else can it do?

Riskalyze allows us to stress test your portfolio. We can show you a likely range of outcomes if certain things occur. For example, what could happen to your portfolio if the stock market drops 10%? What could happen if we experience another event like 2008?
This can help you set your expectations. And it can help us fine tune your asset allocation.


What’s the process?

It is simple…

Complete the Questionnaire.

It takes less than five minutes.  It will ask you some specific questions, and at the end it will pinpoint your risk number.  Just click on the button below.

We will review your Risk Number and evaluate your current investments.

Once we are notified you completed the questionnaire, we will compare the risk number of your current portfolio to your risk number.

We will discuss the results.

Once we have all of the information, we will sit down with you and go over the results.  Or if you live out of the area, we can conduct the meeting online.