Profiling your investment goals

January 13, 1991

Before looking at types of mutual funds, you should first look at yourself and come up with a profile of your investment goals. Here'a a quiz to help you, prepared by the SteinRoe family of mutual funds in Chicago. Choose one of the five possible answers for each question and give yourself the indicated number of points. Here goes:

* What's your age?

A) 25 or under, 4 points.

B) 26 to 35, 3 points.

C) 36 to 55, 2 points.

D) 56 to 62, 1 point.

E) 63 or over, no points.

* How many months of living expenses do you have set aside for emergencies (include CDs, savings and money-market accounts)?

A) None, no points.

B) One month, 2 points.

C) Two to three months, 4 points.

D) Three to six months, 6 points.

E) Six months or more, 8 points.

* Do you own your own home? How much is it worth?

A) Don't own, no points.

B) Up to $25,000, 2 points.

C) $25,001 to $100,000, 4 points.

D) $100,001 to $250,000, 6 points.

E) $250,001 or more, 8 points.

* How much non-retirement-plan money do you have invested in securities and commodities (mutual funds, stocks, bonds, precious metals, etc.)?

A) $10,000 or less, no points.

B) $10,001 to $25,000, 2 points.

C) $25,001 to $50,000, 4 points.

D) $50,001 to $100,000, 6 points.

E) Over $100,000, 8 points.

* What percentage of your income do you save every month?

A) None, no points.

B) Less than 5 percent, 2 points.

C) 6 percent to 10 percent, 4 points.

D) 11 percent to 15 percent, 6 points.

E) Over 15 percent, 8 points.

* If your investment goals were to change, when is it most likely that they would do so?

A) Less than one year, minus 8 points.

B) One to three years, minus 2 points.

C) Four to five years, 4 points.

D) Six to 10 years, 6 points.

E) Over 10 years, 8 points.

* How important is a current monthly income now to your investment plan?

A) Essential, no points.

B) Very important, 2 points.

C) Important, 4 points.

D) Somewhat important, 6 points.

E) Not important, 8 points.

* How important is capital appreciation to your investment plan?

A) Essential, 8 points.

B) Very important, 6 points.

C) Important, 4 points.

D) Somewhat important, 2 points.

E) Not important, no points.

* How much time do you spend each week monitoring the performance of your investments?

A) None, no points.

B) Ten minutes, 1 point.

C) Thirty minutes, 2 points.

D) One hour, 3 points.

E) Two hours, 4 points.

* How much would you allow your investment to decline over a short period and still be able to sleep at night?

A) None, no points.

B) 5 percent, 2 points.

C) 10 percent, 4 points.

D) 25 percent, 6 points.

E) Over 25 percent, 8 points.

And the envelope, please.

If your total score was under 20, you have a conservative investment profile, and you value capital appreciation, low risk and stability. Your money might best be weighted toward money market, bond and growth-and-income funds, SteinRoe advised.

Scores of 20 to 40 reflect moderate investment personalities. If you're a moderate, you should have a fund mix to match, including money-market, bond and capital-appreciation funds.

Scores above 40 portray an aggressive investment posture. You want higher returns and are willing to accept market volatility and other risks in order to get them. Your money should be in growth-and-income or growth funds.

What if you're a "go for it" guy who got a score of three on the test? Thank SteinRoe for giving you such a cheap lesson.

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