Investment Quiz - Are you "A", "B" or "C"?

Which sounds most like you? You inherit a sizable chunk of money from an aunt whose previous gifts to you have included a copy of The Bunty Annual when you wanted an Action Man, or a compendium of board games when you wanted a Subbuteo set (complete with battery-operated floodlights).

On receipt of the money do you: put it in the bank and ignore the branch manager's pleas to let him invest it for you, preferring the safety of a savings account ; spread the money over a number of investments , with varying risk profiles geared to various stages of the economic cycle or put it all on Jack the Ripper, running in the 3:45 at Haydock Park? Whichever you pick is roughly representative of what sort of investor you are.

Like most human qualities, a person's investment mindset is not easily slotted into categories - human beings are far too subtle for that. But in the A-Z of investment, A, B and C could stand for Adventurous, Balanced and Cautious. If you had to line up behind one of those broad labels, which would you pick? In fact, do you even know which one you are? Perhaps this might help make your mind up...

To the following 10 questions, answer either A, B or C. No cheating now

[1] The new investment bandwagon - let's say technology - is rolling through town and picking up speed. Do you:

• A: Jump on - best not to let such a golden opportunity pass by
• B: Hang back - best to gauge what speed - and direction - it's travelling before making a decision
• C: Don't bother - wheels always fall off bandwagons a minute after you've jumped aboard

[2] You inherit / win / find / blag £5,000. Do you:

• A: Find the latest whizz-bang fad investment product and sock the cash into it
• B: Drip-feed the cash into the stock market over a year into a recommended UK growth fund
• C: Put it on deposit - that rainy day could be tomorrow

[3] Your investments have risen by 30 per cent over the year. Do you:

• A: Pull the money and whack it in an even riskier investment
• B: Bank your profits, but keep your original investment where it is
• C: Any investment that can go up 30 per cent in 12 months is to be avoided like the plague

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[4] Which of the following best describes your attitude to risk:

• A: "If you never take a chance, youll never get a broken neck"
• B: "Softly, softly, catchy monkey"
• C: "In my garden, I have a fully-functioning nuclear fallout bunker"

[5] How would you describe your investment portfolio:

• A: Highly illiquid, leveraged and very dangerous
• B: Mainly UK equity funds, but some overseas equity funds, some exposure to bonds and three month's net salary as cash in the bank
• C: Mainly cash, but not more that £35,000 in one single savings account as that is the compensation limit if a High Street bank goes belly-up

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Martin Fagan
10 June 2008 © Moneyextra.com

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