1. Divide your annual living expenses by your available retirement savings. What percentage do you arrive at?
Less then 5% More then 5% but less then 12% More then 12% but less then 18% More then 18% but less then 25% More then 25%
2. What is your after tax employment income?
Less then $50,000 $50,000 to $74,999 $75,000 to $99,999 $100,000 to $199,999 More then $200,000
3. Do I expect my salary to increase at or above that rate of inflation, which has averaged 3.1% over the past 75 years?
Strongly disagree Disagree Somewhat Agree Agree Strongly Agree
4. I am willing to take intelligent risk with the money I have invested for the long term?
5. Over a 12 month period, what is the maximum unrealized loss you would tolerate before you would sell some or all of your investments?
-36% -26% -16% -6% Zero, I don’t tolerate losses
6. If you owned an investment that fell over 20% in a short time, this happened in October 1987 in one day, what would you do?
Sell all of the remaining investment Sell 75% of the investment Sell 50% of the investment Sell 25% of the investment Don’t sell and hold on to the entire position
7. Are you comfortable investing in mutual funds of companies located outside the United States? These funds would have the potential to provide higher returns over the long term.
8. Some bonds fell by more then 10 % during the first half of 1994. If you held a safe investment that fell 10% over a six month period, what would you do?
9. How do you feel about taking risks?
Very Comfortable Comfortable Somewhat Comfortable Uncomfortable Very Uncomfortable
10. I invest hastily without thoroughly investigating all the possibilities.
11. I focus on long term gains rather then short term gains.
12. If the market declines I will sell my riskier investments and put the proceeds into assets that are less risky.
13. On a scale of 1 to 100, with 100 being the most risk, what is your estimate of proper risk exposure for your portfolio?
A low risk portfolio of 10 or less, this portfolio has 15% or less in equity mutual funds and 85% or more in bond mutual funds. A risk exposure of 35 which has 45% equity mutual funds and 55% in bond mutual funds. A middle level of risk of 55, which has 65% equity mutual funds and 35% in bond mutual funds. A risk exposure of 75 which has 85% equity mutual funds and 15% bond mutual funds. A risk exposure of 95 which has 100% in equity mutual funds .
14. Making a lot of money is important to me.
15. How much do you agree with this statement, I want my investments to be risk free. Remember, the lower the risk the lower the expected returns.
16. I am content with slow and steady growth in my investments.
17. To make money investors must be willing to take on some risks.
18. Assuming your investments do not increase in value, within how many years do you plan to withdraw 20% or more of all your investments?
Less then two years More then two but less then five years More then five but less then eight years More then eight but less then ten years More then ten years
19. Assuming your investments do not increase in value, within how many years do you plan to withdraw 50% or more of all your investments?
20. How old are you? OR if these funds are earmarked for heirs what is their average age?
35 or younger 35 to 50 51 to 55 56 to 60 Over 60
21. How many months of emergency funds do you have set aside? This is in addition to your long term investments.
6 months or more 5 months 4 months 3 months none
22. Calculate your net worth, which is your assets minus your liabilities. Include all brokerage accounts, 401k’s, rental properties, home equity and any other business interests. Less then $30,000 $30,001 to $50,000 $50,001 to $100,000 $100,001 to $250,000 Over $250,000
23. Indicate the value of your long term investments; be sure to include any deferred compensation plans, brokerage accounts, regular savings accounts, etc. Less then $30,000 $30,001 to $50,000 $50,001 to $100,000 $100,001 to $250,000 Over $250,000
24. My friends and family often ask me my opinion about financial matters.
25. What are the three risk factors that explain 95% of the variability of stock market returns?
Market risk, market capitalization, and book to market ratio Interest rate risk, currency risk, and Federal Reserve policy Earnings momentum, beta, and earnings per share Growth risk, EBITDA, poor stock performance Brand awareness, CEO pay, the weather report
26. What percent of large cap mutual fund managers beat the S & P 500 over a ten year period after fees, loads and taxes?
3% 13% 38% 59% 83%
27. How many years of experience do you have investing in the stock market?
None Less then two years Two to five years Six to Ten years Over ten years
28. Approximately 17,000 mutual funds have been started since 1961. How many of these funds are now out of business. 4,816 2,752 1,259 642 37
29. A study analyzed how asset allocation, market timing and stock selection explained returns. Based on a comparable portfolio of index funds what percentage of returns were explained by asset allocation? Less then 10% 25% 50% 75% Over 95%
30. From 1980-1989 $10,000 invested in the S&P 500 gained $40,200. If an investor would have not been invested in the market on the 40 days with the largest gains, what would his gains have been?
$36,700 $32,560 $24,290 $11,320 $4,700
31. A basic test (Vanguard/Money Magazine investor Literacy Test) regarding investing was given to 1,000 investors. What was the average percent of correct answers out of twenty?
39% 50% 73% 80% 97%
32. From 1988-1997 how many of 32 market timing newsletters beat the S & P 500?
0 7 13 19 27
33. In 1998 the S & P was up 28.6% for the year. Without the top ten days of the year what would the total return have been?
25% 20% 13% 5% -4%
34. The interest rate on most bank savings accounts is equal to or less then the rate of inflation? Strongly disagree Disagree Somewhat Agree Agree Strongly Agree
35. Comparing the returns of the S & P 500 to the returns of a small company value index from 1927-2004, an investment of $1000 in the S & P grew to $2.3 million. How much would $1000 have grown to if invested in the small company value index? $800,000 $2,500,000 $7,000,000 $25,000,000 $40,000,000
36. A major international accounting firm performed an analysis of the first twenty five years of indexing. They determined that the main reason investors did not invest in index funds was:
The need to beat the market Not being educated about indexing Not enough index funds available High costs associated with indexing High tax burden associated with investing in index funds
37. In 1997 Warren Buffet wrote the best way to own common stocks is to: Buy momentum stocks Buy growth stocks Buy when stocks are low and sell when they are high Buy the hottest mutual funds Buy index funds
38. The investor who buys and holds will outperform the investor who trades frequently. Strongly disagree Disagree Somewhat Agree Agree Strongly Agree
39. From 1926-2000 what was the annualized return of the S&P 500?
3% 5.5% 8.7% 10.4% 14.4%
40. Within how many years do you plan to withdraw 70% or more of you investments? Less than 2 years More than two but less than six Six to eight years Eight to ten years Over ten years
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*Schorpp Capital Management is a Registered Investment Advisor in the State of New Jersey. Any advice is intended for residents of New Jersey.