Outgoing or shy. Aggressive or cautious. Impulsive or patient. Everyone has an individual personality, which affects their investment decisions.

Outgoing or shy. Aggressive or cautious. Impulsive or patient. Everyone has an individual personality, which affects their investment decisions. Your investment personality is primarily influenced by your risk tolerance—the amount of uncertainty you're willing to accept in exchange for potentially higher rewards.

By establishing a clear idea of your investment personality, you can select a retirement portfolio that's in sync with your individual profile. Otherwise, you may select investments that are not appropriate for your personality and specific needs. This can lead to imprudent choices based on emotions, rather than strategic decisions.

Determine your risk tolerance
Start by asking yourself a few questions:

• What's more important to me—preserving my retirement assets or increasing my potential wealth?
• What short-term risk am I willing to consider in seeking better long-term results?
• Am I willing to forgo potentially larger returns in exchange for relatively more stability?

Answers to questions such as these may help you determine your profile. For example, if stability and preservation of retirement assets are your priorities, you're probably a conservative investor. If you can accept some fluctuations in your portfolio's value in exchange for higher return opportunities, you're likely a moderate, less conservative investor. If you're willing to assume a high level of risk in exchange for potentially greater returns, you're probably an aggressive investor.

Focus on your time frame
While your investment personality is based largely on your tolerance for risk, it will also be affected by your investment time frame. So another important question is: When do I expect to need the funds in my retirement plan?

For example, let's say your risk profile shows you're a conservative investor. However, you don't anticipate withdrawing retirement funds for another 15 years (a long-term investment time frame). With time on your side, you probably can afford to ride out the market's normal ups and downs. Therefore, you may be willing to include some stock investments in your portfolio in pursuit of higher returns.

Consider sample portfolios
Your investment personality will determine the overall structure of your portfolio. Here are some strategies for different profiles:*

Conservative— short-term investment time frame. Investment options may include a larger perce0ntage in a short-term bond fund and money market fund, with a smaller percentage in an equity index fund.

Moderate— mid-term investment time frame. Investment options may include a small portion in a growth stock fund and an international equity fund, a larger percentage in a balanced fund, and a smaller allocation in a bond fund and a money market fund.

Aggressive— long-term time frame. Investment options may include a larger allocation to a growth stock fund, a smaller percentage in a balanced fund, and a modest portion in a bond fund.

Next step
Once you've determined your investment personality, examine all your investment portfolios to see whether they're still appropriate for you. Then select alternatives and an investment mix that matches your profile and situation.

*These are hypothetical examples. Your particular profile/situation and the investment alternatives available through your plan or otherwise will determine your individual portfolio allocation.

The above article is for general information only and is not intended to provide specific advice or recommendations for any individual. Consult your attorney, accountant, or financial or tax advisor with regard to your individual situation.

Mutual of America Life Insurance Company is a Registered Broker-Dealer.