Personal Finance · Interactive Tool
How much risk actually fits you?
The single biggest investing decision is how much to keep in stocks versus bonds — and the right answer isn't just about nerve. It blends what you can afford to lose, what you can stomach, and what your goal truly needs. Six quick questions place you on the spectrum and suggest a starting point.
Answer the six questions
You've answered 0 of 6. Your risk profile and a suggested stock/bond starting point will appear here once all six are in.
Three dimensions, and the one that binds
- Ability is your capacity to absorb a loss: a long horizon, a stable income, and a healthy cash cushion all let you ride out downturns without being forced to sell.
- Willingness is your temperament: whether a 30% drop makes you sell in a panic or shrug. The best portfolio is worthless if you abandon it at the bottom.
- Need is how much return the goal actually requires. Taking more risk than you need to reach the goal adds danger without purpose.
When these disagree, the lower of ability and willingness usually wins — there's no point taking risk you can't afford or can't sit through. Treat the suggested allocation as a starting point for thought, then explore the trade-off in the Asset Allocation tool. This is educational only and not personalized financial advice.
Sources & further reading
How this tool was made
The questionnaire scoring is our own rubric — a teaching device, not a validated psychometric instrument. The portfolio consequences it shows you are real, though: the best and worst years and the typical range are computed from actual annual US returns since 1928.
Research
- Markowitz, H. (1952). “Portfolio Selection.” The Journal of Finance 7(1): 77–91. The founding paper of modern portfolio theory.
Data
- Historical Returns on Stocks, Bonds, Bills & Real Estate — United States, Aswath Damodaran, NYU Stern School of Business. Annual series from 1928 (histretSP.xls), published by the author without stated usage terms; used with attribution.
Educational use only, not financial advice. Every figure traces back to the sources above or to the inputs you set — the full method and the source code are public.