You have $10,000 invested in stocks and mutual funds. The past quarter has been rough - the value of your holdings has dropped by 20%. You:
Cash out whats left and stow it under your matress. Move all your money to a government bond fund. Do nothing. You're sure the market will rebound in the long run. Pour another $10,000 into the stock market. After all, it's cheap!
Your spouse is driving the two of you to the airport to catch a flight to your best friend's wedding. You're running late, and there's a good chance you'll miss the plane - the last one that'll get you to the ceremony on time. You:
Call your friend and apologise for not making the wedding. He'll just have to find another best man. Cross your fingers and hope that traffic eases up. Tell your spouse to pick up the pace. Keep your eyes peeled for cops as you force your spouse to speed down the shoulder to the airport.
An old friend is starting a company and wants you to invest $20,000. You think it's a brilliant idea. Your friend has made the same offer to ten potential investors, but only needs five. She will allocate the slots of a first-come, first-serve basis. You:
Decline immediately. You need the money for a tax-deferred college savings plan for your newborn. Are tempted, but think you can't afford to lose that much. Ask her if she'll accept $5,000 instead of the full $20,000. Borrow $20,000 and deliver the cheque by messenger.
Which of the following statements best describes your attitude toward managing your investments?
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