Methodology & Disclosures

How we measure Risk IQ.

Risk IQ is a single number from 1 to 99 that summarizes how much portfolio swing a person is comfortable with. This page lays out how we get to that number, what we use to compute it, what we don't claim, and the academic and industry work it's built on.

How it works

A client answers ten short questions covering goals, time horizon, investable assets, an explicit loss-tolerance slider, three "bracketing" portfolio comparisons, and a single gut-check question modeled on the Survey of Consumer Finances. Each answer is scored and the scores are blended into one number on a 1–99 scale. Higher numbers mean a person is comfortable with larger short-term swings in exchange for higher expected long-run returns.

The number is then translated into a dollar range — what the client's stated investable assets would swing by in a typical six-month period given that level of tolerance. We use a 95% confidence interval on a blended-asset benchmark calibrated against historical returns.

What we measure

  • Goals & horizon. Retirement, college, income, debt payoff, legacy. Years until the money is needed.
  • Capacity. Investable assets relative to age and intended retirement age.
  • Stated tolerance. An explicit loss-tolerance slider — the percentage range a client says they could live with over six months.
  • Revealed preference. Three forced-choice "less risk / original / more reward" comparisons that triangulate the slider answer with side-by-side dollar trade-offs.
  • Gut check. One Survey-of-Consumer-Finances–style question that surfaces a quick self-classification.

What we use as sources & benchmarks

  • Grable & Lytton (1999) Financial Risk Tolerance Scale. A 13-item scale that's the most validated short-form risk-tolerance instrument in personal finance. We borrow its multi-dimension idea — mixing stated tolerance, behavior preference, and a gut-check rather than asking only one question. Grable, J. & Lytton, R. (1999). Financial Counseling and Planning, 10(1), 61-73.
  • Barsky, Juster, Kimball & Shapiro (1997). The income-gamble framing used in our bracketing questions traces back to this paper's experimental measure of risk preference in the Health and Retirement Study. Barsky et al. (1997). Quarterly Journal of Economics, 112(2), 537–579.
  • Survey of Consumer Finances (SCF). Our final gut-check question uses the four-bucket framing the Federal Reserve has run on U.S. households since 1983.
  • Markowitz (1952). Modern Portfolio Theory — risk and return as paired, not separate. Foundation for the asset-class benchmarks we use to translate a tolerance score into a dollar range. Markowitz, H. (1952). Journal of Finance, 7(1), 77–91.
  • J.P. Morgan RiskMetrics & Value at Risk (VaR). The 6-month dollar range we show is a Value-at-Risk style figure: the range a portfolio at the client's stated tolerance level would typically land within. We use a 95% confidence interval on a blended-asset benchmark calibrated against historical returns.

Disclosures

  • Risk IQ is a risk-tolerance estimate, not a forecast and not a recommendation. Two people with the same number can have very different portfolios.
  • The dollar ranges we show are based on historical volatility of broad asset-class indexes and are calibrated to a 95% confidence interval. Actual results can fall outside that range, and sometimes do — especially in the early months of a market dislocation.
  • We do not collect account numbers, Social Security numbers, or passwords during the assessment. If you choose to upload statements, they are transmitted over TLS and stored only on Your Best Interest Financial Services, Inc. systems.
  • Securities offered through Invicta Capital, LLC, Member FINRA/SIPC. Advisory services offered through Invicta Advisors, LLC. 527 Cedar Way, Suite 101, Oakmont, PA 15139 · 412-349-8684.
  • Your Best Interest Financial Services, Inc. is not affiliated with Invicta Capital, LLC or Invicta Advisors, LLC.
  • Check the background of these investment professionals on FINRA's BrokerCheck.

What we don't promise

  • We don't promise the score is "right" — only that it's an honest summary of the answers you gave us. If your answers are sandbagged or overstated, the score will be too.
  • We don't promise the dollar range is what will happen. It is a confidence interval, not a guarantee. Markets do unusual things and history is not a contract.
  • We don't sell, rent, or share your responses. Ever.

Last updated: 2026. Questions about the methodology? Email gteal@ybifs.com.