After more than a decade being housed on a Rutgers Cooperative Extension personal finance web page, a 13-question survey to assess personal investment risk tolerance has moved to a website at the University of Missouri. The change is being made as a result of a website re-design involving the use of new programming language at Rutgers University.
The Investment Risk Tolerance Quiz was developed by John Grable at the University of Georgia and Ruth Lytton at Virginia Tech and was empirically tested and published in a seminal 1999 journal article about investment risk tolerance. “We never imagined how extensively the survey would be used. It has been used by financial planners to assess client risk tolerance and globally by researchers to advance the study of risk tolerance,” noted Lytton.
The quiz has been featured widely in social media and in both personal financial planning textbooks and popular-press books for self-assessment of risk tolerance attitudes and the effect on personal investment decisions.” Even motivational speaker Tony Robbins featured it in a blog post. All of these efforts have increased awareness of the Rutgers survey and contributed to its popularity. When people search the words “Investment Risk Tolerance Quiz” on Google, the quiz is the first item that is listed.
More than 200,000 people have taken the quiz, which is believed to be the largest personal finance research data base ever created. Quiz data have been used for several dozen research papers and graduate student theses and dissertations. Rutgers Cooperative Extension will continue to maintain a downloadable PDF print copy of the quiz on their website but active data collection and immediate online access to risk tolerance results will move to University of Missouri Personal Financial Planning Department. The site will be overseen by Abed Rabbani, an assistant professor in the University of Missouri Personal Financial Planning Department. Rabbani obtained his Ph.D. at the University of Georgia and studied under Grable.
“The online Investment Risk Tolerance Quiz is in good hands and will continue to benefit online users and generate useful data about investment risk tolerance for a new generation of personal finance scholars,” noted Barbara O’Neill, distinguished professor and extension financial management specialist at Rutgers University. John Grable stated that, “Dr. Barbara O’Neill and her colleagues at Rutgers University provided a valuable service to consumers and researchers by hosting the risk quiz. I am so pleased to know that the quiz will be available at no cost to the public through the University of Missouri.”
On the receiving end of the quiz, Rabbani noted, “It is a privilege to oversee this large data collection effort. I have added affinity to it as my doctoral dissertation was based on the dataset utilizing this quiz. I thank Dr. Barbara O’Neill and Rutgers University for overseeing this valuable resource for so many years. We will give our best to ensure quality while it is hosted at the University of Missouri.”
These thoughts were echoed by Fran Lawrence, professor and department chair of the University of Missouri Personal Financial Planning Department, who noted, “It is definitely an honor to be associated with such a credible research tool created by Dr. Grable and Dr. Lytton and particularly rewarding to step into the footsteps of hosting the site from an outstanding professional as Rutgers’ Dr. O’Neill.”
Investment risk tolerance is the amount of variability in the dollar value of an investment that an investor is able to tolerate. It is a key factor in investment decision-making and is affected by many personal factors such as an investor’s age and prior investment experience and how financial markets are performing. Ongoing research about investment risk tolerance will enable researchers to better understand investor decisions.