When you sign up for Grifin, you answer a few questions that help us determine your risk tolerance. This is used to provide you with investments that are well suited for your needs.
What does my risk tolerance mean?
When you sign up for Grifin, you answer a few questions that help us determine your risk tolerance. Based on your answers, we’ll assign you one of three risk levels:
- Conservative
- Moderate
- Aggressive
If you have a Conservative risk tolerance, you will only automatically invest in companies that have a Low Risk level.
If you have a Moderate risk tolerance, you will only automatically invest in Low and Medium Risk companies.
If you have an Aggressive risk tolerance, you will invest in all companies offered on Grifin.
How is a company’s risk tolerance decided?
Investment companies/experts use various tools, from basic to advanced, to judge how risky an investment might be and to guess if there might be problems ahead. Our company has its own method to decide how risky each investment is, so we can match it to what you are comfortable with.
To figure out how risky an investment is, we look at three main things:
- How much its value goes up and down
- Its 'Beta' (a measure of how it behaves compared to the whole market)
- How big the company is in terms of its market value
Every three months, we review and categorize each investment based on these factors and we place them into one of three groups:
- Low Risk
- Medium Risk
- High Risk
This way, you have a clearer idea of what you’re getting into and can determine if your investments align with your objectives.