By accounting for the amount and type of outside investable assets, we can make investment recommendations that fit your goals for this portfolio.
Please note: Total Investable Assets are defined as the overall amount you have available to invest. This includes the amount for this account as well as any other accounts managed by the Morningstar Investment Services and excludes real estate property holdings.
1. When do you expect to begin withdrawing money from this investment account?
2. Once you begin withdrawing money from this investment account, how long do you expect the withdrawals to last?
3. Which of the following portfolios would you choose for this account?
Long-term investors should be aware that their ability to purchase goods and serviecs in the future might actually decline if a portfolio's returns are less than the inflation rate. However, long-term returns that significantly exceed the rate of inflation are often realized by assuming additional risk.
The preferred portfolio will most likely:
4. Consider your goals for this account. Based on a hypothetical investment amount of $100,000 and a time horizon of one year, which portfolio are you most comfotable with?
Portfolios with highest average returns also tend to have the highest chance of short-term losses. The table provides the average returns of five hypothetical investments of $100,000 and the probability of an ending value of less than $100,000.
Probabilities After One Year
5. Which statement best describes your investment goals for this account?
Historically, investors who have received high long-term average returns have experienced greater fluctuations inthe value of their portfolio and more frequent short-term losses than investors in more conservative investments.
6. Assume that you own a well-diversified portfolio worth $100,000 and have ten years until you must begin taking withdrawals from it. Over a six-month period, it falls by 20%, consistent with a decline in the overall market. The portfolio is now worth $80,000.
How would you react?
7. For this account, which of the following portfolios would you prefer to hold over a one-year period?
The percentages for each portfolio reflect the maximum amount that each portfolio may gain or lose in this hypothetical scenario. Note that the portfolio with the highest potential gain also has the largest potential loss, illustrating the relationship between risk and return.
Hypothetical Total Return One Year
8. For this account, I am comfortable with investments that may frequently experience large declines in value if there is a potential for higher returns.
Additional Considerations Optional
Provide any other useful account details or restrictions (e.g., circumstances requiring partial/complete withdrawl, changes to savings rate, special needs for dependants, security restrictions, ect.)