Having an appropriate strategy for your risk tolerance helps remove emotional reactions from the investment management process so you can stick to the strategy to reach your goals regardless of market conditions. At Cambridge Advisors, we measure risk tolerance in multiple ways and multiple times as risk tolerances often change as your circumstances change.
We have been utilizing an additional tool to help us measure your risk tolerance. Riskalyze software is an interactive questionnaire approach that objectively quantifies your risk tolerance and assigns a "risk number". This risk number can then be compared to your current portfolio to see if the two align or if adjustments need to be made. The Riskalyze software also analyzes each investment individually to help identify where additional risks lie.
We will be rolling out Riskalyze more widely over the next year. A link will be emailed to you where you'll be able to go through the questions at your convenience. Because it is interactive and based on how you answer each preceding question, it fine tunes the results into a more meaningful measure. When we meet, we'll be able to discuss the results and make sure that the risk number is appropriate and talk about how it relates to your investments. Periodically, we will email the link again to see if changes are needed in your investments.