As we said earlier, the fundamental allocation between Growth and Moderation is the most important decision you and we make in designing a portfolio specifically for you. To get to that decision, there are several factors to consider including the time you have to let your portfolio work, your capacity for risk (volatility) and your tolerance for risk.
The longer your time horizon, generally the more you can devote to growth. Conversely, the shorter your time frame, the more certain you must be that the funds will be available when you need them.
Also, you must consider your capacity to take risk. As an example, the more guaranteed income you have in retirement, the more "risk" you may be able to take; you have the capacity for risk because your living expenses are met from other sources.
Lastly, is your temperament. You may have a great capacity for risk in that you may not need your capital to generate income for living expenses, but you may not have the temperament to sleep well not knowing how your portfolio may perform over the next week or quarter or year. You may have the capacity to take risk but not the willingness to take risk. Others may have the willingness to take risk but do not have the capacity to take it. To ascertain your fundamental portfolio mix, we must discuss - at length - your time horizon, your capacity to take risk and your ability to accept risk. These questions cannot be answered solely in a formulaic questionnaire. We spend a goodly amount of time talking and discussing and educating before we make any decisions about how to allocate a portfolio for you.