risk profile(redirected from Risk Profiles)
2. In options, a chart showing the profits and losses on a contract over time. It is created by plotting the value of the underlying asset on the x-axis and the risk on the y-axis. It is also called a payoff profile.
Ask yourself when you plan to use your investment—in a few years to buy a home, start a business, or pay for college, or in the future for retirement. After you have decided how long your money will work, the focus of your preparation should shift to personal preferences:
- Is capital preservation more important to you than outpacing inflation?
- Are you willing to accept fluctuating values when investing for the long term?
- Are you more comfortable with dividends and income, or with growth through capital appreciation?
- Will you accept above-average risk to generate above-average returns?