What is the investment timeframe when answering the risk activity?
- The timeframe on the decision scenarios in the TrueProfile risk activities is within one year. In other words, the client should imagine the outcome of the scenario as happening within a year’s time. TrueProfile uses a near-term time frame because it is measuring the client’s current risk preferences.
- This measurement should not be confused with the time horizon associated with the investment capital. The investment capital could, for example, be a client’s superannuation/retirement funds, with a time horizon of 20+ years. In this case, TrueProfile would capture a snapshot of a client’s current risk preferences toward her superannuation funds.