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ARC Comment:


Risk tolerance questionnaires can be unreliable due to the stress many retirees

actually experience during periods of extreme market collapses, versus what they imagine it might be like when

they're answering the questions on the risk tolerance survey.

These periods, such as from 2000-2003 and 2008-2009, can be terrifying for anyone already retired.
on a fixed income with little hope of future full-time employment feels very different than
investing in stocks when you're younger and have many years until retirement.


Stress from these increases with age; so do risks of cognitive and physical impairment.

Read our case study chapter for a true story about how this affected one couple in retirement.

From Bill Sharpe's RISMAT:



"Anyone who recommends a particular set of investments for an individual, couple or institution

should have a rationale for the recommendation...."


"Advisors often ask clients to answer a series of questions on a 'risk questionnaire' to assess their

willingness to take risk in pursuit of higher expected future incomes...."


"To be kind, one must say that many of these questionnaires are based on little or

highly questionable research."


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