Your risk appetite is how much short-term ups and downs in value you're willing to accept in exchange for higher potential returns. Cash and term deposits barely move but earn less. Shares have tended to outperform cash over the long term but can swing a lot in any given year.

In this video, McKern financial adviser Kristian Tangan explains how a risk profile questionnaire places you somewhere between 'defensive' and 'high growth', the pros and cons of working this out yourself versus with an adviser, and why your risk profile should be reviewed regularly. Younger investors with a long time horizon often take more growth risk; people near or in retirement usually want to protect a larger balance.

In this video

0:00 What does risk appetite mean?

1:40 How do I find out what my risk appetite/profile is?

2:25 Pros and cons of researching your own risk profile vs seeing a professional

3:32 Why it's important to monitor and review your risk profile over time

General information only, not personal advice.