Under 58 pts. -- Very Conservative
You are not willing to accept the risk involved in aiming for a very high return. You don't want to take much risk at all -- your primary goal is to keep as much of your money as possible. As a result, most stocks may be a little too risky for your taste, especially in a turbulent market environment. We [
TheStreet.com Ratings] recommend you stick to the safest bond funds
and money market mutual funds
, where your income stream is predictable and more secure.
To learn more about these types of investments, check out the Booyah Breakdown "Bonding With Bonds" Series and "Mutual Funds: Money Markets." You can also visit TheStreet.com Ratings Screener: Funds and BankingMyWay.com's Money Market Section.
78 to 108 pts. -- Moderate
You're prepared to take on a little added risk to increase your investment returns. This is probably the most common investing approach, with total return (dividends
plus stock price appreciation
) as the goal. To select a stock investment matching your style, we recommend that you research stocks with good growth in revenues
and earnings
that also offer a dividend yield
above that of most major indices
.
You can search TheStreet.com
for stories that focus on "dividend stocks."
109 to 129 pts. -- Aggressive
You appear to be ready to ride out almost any financial storm on your way toward maximizing your investment returns. You understand that to make large returns on your investments, taking on added risk in the form of exposure to higher growth and lower capitalization stocks is a typical route to this end. Also, your answers to the risk assessment quiz indicate that your personal situation should allow for that approach. See
TheStreet.com Ratings Screener: Stocks, for a selection of buy-rated mid-cap stocks
with strong growth in both revenues and earnings per share
. (On the
stocks screener, select "Recommendation: Buy" and "Market Capitalization: Mid Cap.")
Over 129 pts. -- Very Aggressive
According to your responses, you appear to have little aversion to speculation
. Your primary concern is maximizing your investment growth, and you seem prepared to take on as much risk as necessary in order to do so. These investments can be extremely volatile
and susceptible to any one of a number of factors. But, they are highly speculative investments that could provide superior results -- if you can stomach the volatility and uncertainty. Research stocks of companies that have market caps
between $1 billion and $10 billion and have strong recent and projected growth.
You can search TheStreet.com
for stories that focus on "small-cap" and "mid-cap" stocks.
Remember Kathleen?
Because she is funding two goals, Kathleen (see "
Beginner's Guide to Financial Goals") takes the test twice. She's willing to take some risk for herself, which makes her a moderate investor, but little, or none at all, to save for her children's educations, which also makes her a conservative investor.
Later, you'll find out how choosing different levels of risk influences the returns you need to reach your goals.
You need to keep your risk scores in mind whenever you think about buying a stock. It will be your best tool in choosing the stock investments that are right for you. Knowing your risk tolerance is critical. You can't do a good job in deciding on your portfolio's asset allocation
without it.
Next: The Basics of Growth and Income Stocks.
TheStreet.com Ratings Staff
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