Paul Resnik: A better way to measure risk tolerance? Don't bet on it

PA360 revisited

clock • 7 min read

Questions based on gambling are at the heart of risk tolerance testing used by many advisers and yet, argues PA360 speaker Paul Resnik, when it comes to investing, gambling should only be used as an example of what not to do

Clear-headed risk aversion is not a trait you tend to associate with the late Hunter S Thompson, the American ‘gonzo' writer. Nor was the Fear and Loathing in Las Vegas author exactly a stranger to gambling, once writing that he could not quit because "without gambling, I would not exist". But he did understand the reality of it: "There are many harsh lessons to be learned from the gambling experience, but the harshest one of all is the difference between having fun and being smart." While for some there may be fun to be had in gambling, the knowledge your future financial security is at...

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