The decision to save for retirement is an easy one when you consider the potential future benefits, but how to invest is often the source of uncertainty and frustration for new investors.

Before investing, it’s important to know what kind of investor you are so you can select a mix of investments consistent with your financial situation and your risk tolerance. Assessing your risk tolerance is a key factor in determining what kind of investor you are.

What is risk?

Risk can be defined as the possibility of losing all or part of your investment. The potential for higher returns goes hand-in-hand with higher risk. Conversely, low-risk investments are associated with lower returns. Before you consider any investment, it is important to understand risk and to determine your risk tolerance. This tool will help you to determine your risk tolerance.

Select the response to each statement that most closely matches your own investment philosophy. After completing this exercise, you'll have a chance to craft the appropriate mix of investments to fit your risk profile.