| A guide to making the right investment choice
Before You Make Your Investment Decision
Retirement planning is a long-term investment strategy, and a thorough assessment of your retirement needs is crucial. It is important to:
 | 1. | Define your investment objectives |
| 2. | Identify your risk tolerance level |
| 3. | Understand your investment horizon from now to your retirement |
| 4. | Understand the features of each type of fund, including the investment
objectives, investment strategies and asset allocations |
| 5. | Select the fund(s) that best meet your needs |
| 6. | Regularly review your portfolio and make adjustments as your personal circumstances (e.g. salary, age and financial status) change |
| 7. | Refrain from short-term speculation and focus on long-term investment goals |
Generally speaking, if you are quite a number of years away from retirement, your investment time frame will be long enough for you to weather the short-term ups and downs of the market. This is because having a longer investment period allows an adequate time period for market fluctuations to cancel out. You may therefore consider some higher-risk funds for better returns in the longer term.
Nevertheless, if your retirement is only a few years away, preserving the value of your investment may be more important and you may consider some lower-risk funds. Other relevant factors include your level of investment knowledge and risk tolerance.
Once you have identified your personal needs, you can decide the fund choice that best suits your risk appetite and investment style. The following simple questionnaire will help you identify your investment style.
The Self-Assessment Questionnaire
This questionnaire indicates what type of investor you are in terms of risk. Personal circumstances may change and evolve over time, and are not incorporated in the model.
A Life Cycle
| 1. Your age: |
| | a. 30 or below |
| | b. 31 to 50 |
| | c. 51 or above |
| 2. Marital Status: |
| | a. Single |
| | b. Married |
| 3. No. of dependents (including the children below the age of 25): |
| | a. None |
| | b. One |
| | c. Two |
| | d. Three |
| | e. More than three |
| 4. The age of your youngest children |
| | a. No children or the age over 25 |
| | b. 18-24 |
| | c. 12-17 |
| | d. 6-11 |
| | e. 5 or below |
B. Time Scale
| 5. | You are investing or planning to invest to meet your retirement income needs. You expect to retire in: |
| | a. Under 3 years |
| | b. 3-5 years |
| | c. 6-10 years |
| | d. 11-15 years |
| | e. Over15 years |
| 6. | On your expected retirement date, how confident are you that you will have sufficient monies to maintain your living standards? |
| | a. Not confident |
| | b. Slightly confident |
| | c. With confidence |
| | d. Very confident |
| | e. Extremely confident |
C. Risk/Return Assessment
| 7. | Which of the following best reflects your attitude toward investment? |
| | a. | I look up share and fund prices every day |
| | b. | I would have trouble sleeping at night knowing that the value of my investment may go down |
| | c. | I can take risk as long as it doesn't deteriorate my investment principal |
| | d. | Fluctuations do not bother me as long as I am compensated |
| | e. | I don't keep a watch on how my investments are performing |
| 8. | Which of the following best describes your investment capability? |
| | a. | I am not confident in investing for myself |
| | b. | I am a competent investor but prefer to seek minimal professional advice |
| | c. | I am a highly competent investor |
| 9. | Do you have your own property? |
| | a. No |
| | b. Mortgage, with over 70% liability |
| | c. Mortgage, with 50%-70% liability |
| | d. Mortgage, with less than 50% liability |
| | e. Own, without any liability |
Please write down your answers and circle the corresponding marks under the column 'Scores'. Add up the total scores and refer to interpretation below.
| | | Scores |
| Question | Your answer | a | b | c | d | e |
1. | | 1 | 3 | 5 | | |
2. | | 2 | 5 | | | |
3. | | 1 | 2 | 3 | 4 | 5 |
4. | | 1 | 2 | 3 | 4 | 5 |
5. | | 5 | 4 | 3 | 2 | 1 |
6. | | 5 | 4 | 3 | 2 | 1 |
7. | | 5 | 4 | 3 | 2 | 1 |
8. | | 5 | 3 | 1 | | |
9. | | 5 | 4 | 3 | 2 | 1 |
| Total | | | | | | |
|
If your total score ranged from 10-17, 18-24, 25-31, 32-38, 39-45
If your total score ranged from 10-17
AGGRESSIVE
Your score reflects that you are by nature an aggressive investor. You want to maximise your returns and you can deal with uncertainty. You understand that asset prices can go up and down dramatically, and you accept those large swings in prices because you know that in the long run, high risk means the potential for higher return.
What does Elite MPF offer you? Multi-Manager Global Equity Fund, Multi-Manager Asia Pacific (ex-Japan) Equity Fund, Multi-Manager Japan Equity Fund and Multi-Manager Hong Kong Equity Fund have a high risk profile. Though the return on the funds may fluctuate significantly, particularly in the short term, the return is expected to be in line with the fund's investment objective in the long term. |
If your total score ranged from 18-24
GROWTH
Your score reflects that you are a growth investor, meaning that you usually seek significant long-term capital growth and accept a high level of risk. You understand that asset prices can go up and down, and you do not mind fluctuation in prices because you know there is potential return associated with it.
What does Elite MPF offer you? Multi-Manager Growth Fund has a high risk profile whereas Multi-Manager Balanced Fund has a medium to high risk profile. Though the return on the fund may fluctuate significantly, particularly in the short term, the return is expected to be in line with the fund's investment objective in the long term. |
If your total score ranged from 25-31
BALANCED
Your score reflects that you are a balanced investor, meaning that you usually like stability, but at the same time, you want slightly higher profits. You understand that asset prices can go up and down, and you do not mind a slight fluctuation in prices, but would become worried if prices were to go down dramatically.
What does Elite MPF offer you? Multi-Manager Balanced Fund has a medium to high risk profile whereas Multi-Manager Stable Fund has a low to medium risk profile. Though the return on the fund may fluctuate significantly, particularly in the short term, the return is expected to be in line with the fund's investment objective in the long term. |
If your total score ranged from 32-38
MODERATE
Your score reflects that you are a moderate investor. A moderate investor usually likes stability. You are the type of investor who wants their investment to grow slowly and steadily. You are willing to accept lower returns to minimise uncertainty and price fluctuation.
What does Elite MPF offer you? Multi-Manager Stable Fund and Multi-Manager Global Bond Fund have a low to moderate risk profile. Though the return on the fund may fluctuate, the return is expected to be in line with the fund's investment objective in the medium term. |
If your total score ranged from 39-45
CONSERVATIVE
Your score reflects that you are a conservative investor. A conservative investor usually likes stability. You are the type of investor who wants their investment to grow slowly and steadily. You become very concerned if prices fall.
What does Elite MPF offer you? Capital Preservation Fund has a low risk profile in terms of fluctuation in the value of assets. |
| The above is just a quick quiz to help you identity your risk tolerance level. It is intended to provide general guidance and should not be treated as a substitute for specific advice. Please seek professional advice before making any investment decisions.
Each constituent fund is subject to market fluctuations and to risks inherent in all investments. It should be noted that investment return and the value of units may go down as well as up. For full details, please refer to the offering document of the Elite MPF. |
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