Quick Guide to Investing: Risk Tolerance | SunTrust Investing & Retirement

Quick Guide to Investing: Determining Your Investment Risk Tolerance

It’s understandable to want to be cautious with your money. But interest rates have been low for the better part of a decade; and if that environment continues, you may need to take some risks in order to earn enough of a return to reach your goals. The challenge is in finding the right balance to make your investment risk reasonable rather than reckless.

bar graph - risk tolerance

How to gauge your risk tolerance

When you think about “investment risk,” what’s the first thing that comes to mind? Do you envision a huge windfall from a stock that soars? Or do you picture yourself wiped out from a market crash? Certain people, regardless of how much they have, are simply more comfortable with taking risks than others. Neither is better or worse – they’re just different.

Knowing where you fall on the spectrum between conservative (unwilling to tolerate any noticeable downside fluctuations) and aggressive (willing to take on maximum risk for maximum reward potential) is important, however, because it helps you identify how much risk you can take on comfortably without causing you to react badly when markets fluctuate dramatically.

Time and Risk

Generally, the further out your goals, the more investment risk you can afford to take:

  • Longer-term goals (e.g., retiring in 20 years, college savings for a small child)
  • Shorter-term goals (e.g., buying a house, retiring in 5 years)

Your risk tolerance may change over time

While your general feelings about risk may not change over the years, your capacity to take on additional risk may very much change based on your changing financial circumstances.

Events that may reduce your risk capacity:

  • Taking on a large mortgage
  • Having a new child
  • A job loss
  • Death of a spouse or divorce
  • Needing to care for an aging parent

Events that may increase your risk capacity:

  • Significant salary increase or bonus
  • Inheritance
  • Selling your business
  • Paying off your mortgage

DISCLAIMERS

1 “The Reality of Investment Risk,” March 6, 2015, Financial Industry Regulatory Authority

*Past performance does not guarantee future results.

 

877.962.9032
Contact the STIS Client Advisory Center

Find a SunTrust Location

Go

Investing & Retirement Resource Center

Investment and Insurance Products:

Are Not FDIC or any other Government Agency Insured   Are Not Bank Guaranteed  May Lose Value 

© 2018 SunTrust Banks, Inc

equal housing logoSunTrust Bank is an Equal Housing Lender. Member FDIC

equal housing logoEqual Housing Lender. SunTrust Mortgage, Inc

SunTrust, SunTrust Mortgage, SunTrust PortfolioView, SunTrust Robinson Humphrey, SunTrust Premier Program, AMC Pinnacle, AMC Premier, Access 3, Signature Advantage Brokerage, Custom Choice Loan and SunTrust SummitView are federally registered service marks of SunTrust Banks, Inc. All other trademarks are the property of their respective owners.

Services provided by the following affiliates of SunTrust Banks, Inc.: Banking products and services are provided by SunTrust Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank, SunTrust Delaware Trust Company and SunTrust Banks Trust Company (Cayman) Limited. Securities, brokerage accounts and insurance (including annuities) are offered by SunTrust Investment Services, Inc., a SEC registered broker-dealer, member FINRA, SIPC, and a licensed insurance agency. Investment advisory services are offered by SunTrust Advisory Services, Inc., a SEC registered adviser. GFO Advisory Services, LLC is a SEC registered investment adviser that provides investment advisory services to a group of private investment funds and other non-investment advisory services to affiliates. Mortgage products and services are provided by SunTrust Mortgage, Inc.

SunTrust Mortgage, Inc. - NMLS #2915, 901 Semmes Avenue, Richmond, VA 23224, 1-800-634-7928. CA: licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, IL: Illinois Residential Mortgage Licensee #MB-989, Department of Financial and Professional Regulation, 100 W. Randolph, Suite 900, Chicago, IL 60601, 1-888-473-4858, MA: Mortgage Lender license #-ML-2915, NJ: Mortgage Banker License - New Jersey Department of Banking and Insurance, NY: Licensed Mortgage Banker—NYS Department of Financial Services, and RI: Rhode Island Licensed Lender.

"SunTrust Advisors" may be officers and/or associated persons of the following affiliates of SunTrust Banks, Inc.: SunTrust Bank, our commercial bank, which provides banking, trust and asset management services; SunTrust Investment Services, Inc., a registered broker-dealer, which is a member of FINRA and SIPC, and a licensed insurance agency, and which provides securities, annuities and life insurance products; SunTrust Advisory Services, Inc., a SEC registered investment adviser which provides Investment Advisory services.

SunTrust Private Wealth Management, International Wealth Management, Business Owner Specialty Group, Sports and Entertainment Group, and Legal and Medical Specialty Groups and GenSpring are marketing names used by SunTrust Bank, SunTrust Banks Trust Company (Cayman) Limited, SunTrust Delaware Trust Company, SunTrust Investment Services, Inc., and SunTrust Advisory Services, Inc.

SunTrust Bank and its affiliates do not accept fiduciary responsibility for all banking and investment account types offered. Please consult with your SunTrust representative to determine whether SunTrust and its affiliates have agreed to accept fiduciary responsibility for your account(s) and if you have completed the documentation necessary to establish a fiduciary relationship with SunTrust Bank or an affiliate. Additional information regarding account types and important disclosures may be found at www.suntrust.com/investmentinfo.

SunTrust Robinson Humphrey is the trade name for the corporate and investment banking services of SunTrust Banks, Inc. and its subsidiaries, including SunTrust Robinson Humphrey, Inc., member FINRA and SIPC.