Making investments is about making choices. Your risk profile reflects the type of investor you are and your attitude to the return of your investments and the risk they entail. A higher return is therefore associated with a higher risk.
When drawing up your risk profile, we take account of:
- your financial situation;
- your knowledge of and experience with investments;
- your investment objectives;
- your attitude to risk.
We have defined four distinct risk profiles.
Highly defensive risk profile
If you have a highly defensive risk profile, you invest primarily in products that can be quickly redeemed. That keeps the risk down. You therefore have a short investment horizon. You can generate additional return by investing in interest-bearing products. Only investments offering capital protection should be included in the equities component. The emphasis therefore remains on playing it safe.
Defensive risk profile
If you’re a defensive investor, you put the emphasis on security. You’re prepared to accept a little more risk than a highly defensive investor and you can also afford to do without your money for a somewhat longer period of time (three to five years). You have a bias for interest-bearing investments. The weighting of your equity investments will be on the modest side. They should preferably be made up of capital-protected instruments. Effective diversification remains important.
Dynamic risk profile
As a dynamic investor, you target a potentially higher return by allocating your investments near enough evenly between shares and interest-bearing products. Under normal market conditions, this allocation represents for you a good balance between risk and return. However, you are also aware that prices can fall. Therefore, trying to achieve a higher return entails taking on additional risk. Dynamic investors can do without some of their assets for a longer period (5 to 7 years).
Highly dynamic risk profile
As a highly dynamic investor, the focus of your investments is on shares. Your primary objective is a high return. You’re not put off by substantial fluctuations in the value of your investments. With this profile, you only opt for a small proportion of investment products offering capital protection or for interest-bearing investments. Therefore, having a large percentage of shares gives you the chance of achieving a higher return, but also exposes you to greater risk. Effective diversification is important at all times.