Risk tolerance is all about personal preference. Especially when it comes to something as important as your retirement savings, risk requires a personal decision. (Which is just one more reason that we don’t like how the finance industry tries to cram us into a bunch of prepackaged solutions!)

When it comes to investing in the stock market, the mantra you want to live by is:

Manage the downside. The upside will take care of itself.

And that’s what we want you to think about when you’re choosing your Risk Profile.

What’s a Risk Profile?

A Risk Profile is simply how much you’re willing to lose. We’ve designed our algorithms so that no matter what happens in the S&P 500 Index, you’ll never lose more than you’re willing to lose — and you get to pick that number.

We offer Risk Profiles in factors of five: 5%, 10%, 15%, … all the way up to 95%. A “50% Risk Profile” means that the information we send you will prevent you from losing more than 50% of your total retirement portfolio. Does that sound too risky? Try 25%!

Even though we think this is obviously a better way to invest, most people aren’t used to being offered such a clear way to limit their investment risk, and it can seem like a hard choice to make. Instead, plenty of people would rather bury their heads in the sand and pay someone else to make the decision for them. Ignorance is bliss, right?

But if you’ve read this far, you probably don’t want to be one of those people. So let’s talk about choosing the best Risk Profile for you.


Of course, like anything else in investing, the more you’re willing to lose, the more you can potentially gain. Choosing your Risk Profile will be finding your personal preference for the balance between these two factors. Here’s a common scenario:

Grace knows that she needs to allocate her savings to the stock market if she ever wants them to grow, but she hates losing money in the market, so she chooses the minimum 5% Risk Profile and reads the Risk Report.

But when Grace sees that a 5% Risk Profile has only outperformed her beloved bond funds by a little bit in the past few years, she knows that she needs to come to terms with taking a tiny bit more risk. She changes her Risk Profile to 10% and looks at the report, but it still doesn’t feel quite right.

One more try at 15% and Grace likes what she sees. Her recommended allocation is 37.93%, which sounds reasonable, and her portfolio gains in the last year were 6.79%. All while being protected from 15% losses. All things considered, that feels pretty good. She really likes the way the performance chart looks. Grace has found her “sweet spot.”

We’ve already run all the numbers for her. The only thing that’s left for Grace to do is feel it out and find that “sweet spot,” which is exactly what she did.

What makes you comfortable? For Grace, comfort was knowing that she could get over 6% returns in a year while being protected from 15% losses. That just felt “right” to her. For you, it might be something completely different, but whatever it is, we want you to feel it out on your own.

And that’s why when you subscribe to our $7.99 a month service, you can sample as many different Risk Profiles as you need to find your “sweet spot.” We want you to feel like you’re really, totally in control of your savings. And you shouldn’t ask for anything less!

See how our 25% and 50% Risk Profiles have performed since 2000.

Learn more about what’s in the “Risk Report.”

Take a look at our Subscriptions!