Choosing what to watch on your favourite streaming service can be tricky because there are so many choices. If you’re like us, you may have occasionally spent more time scrolling through your options than actually enjoying a show. It can be the same with trying to choose investments.

At RBC InvestEase, we want to make investing easy for you. When you first go onto our site, we ask you a few questions to figure out which investment portfolio is right for you. Our questionnaire is done entirely online and usually takes about four or five minutes to fill out. If you aren’t sure how to answer certain parts you can always call or chat live to have a member of our team walk you through it.

The purpose of the questionnaire is to determine the right portfolio for you (article: Isn't Investing Like Gambling?). Investment returns can be volatile: some years they go up (sometimes a lot), some years they go down (sometimes a lot) and some years they’re flat. Because nobody can predict how financial markets are going to perform, we focus on determining how much risk you could take (your risk capacity) and how much you want to take (your risk tolerance).

Your risk capacity measures your ability to absorb potential losses in your portfolio. If you’re investing a small portion of your savings and don’t need the money for a long time, you can probably afford to take on more risk. On the other hand, if you’re investing most of your savings for a relatively short time horizon, you probably have less capacity to ride out the ups and downs of a riskier portfolio. Questions that ask how much you plan to invest, when you’ll need the funds and the value of your net liquid assets are designed to assess your risk capacity.

Your risk tolerance is your willingness to take on risk. Some people love the thrill of a horror movie; others prefer a family comedy. We want to gauge how you’re going to feel about potential losses in your portfolio: does the idea of losing 5% of your investments make your palms sweat, or would you shrug it off as a normal market fluctuation? We gauge risk tolerance through questions like “How much investment risk are you comfortable with?”

After you’ve answered all the questions, our smart technology will recommend one of five portfolios for you: Very Conservative, Conservative, Balanced, Growth and Aggressive Growth.

Each portfolio is associated with a different risk level: for example, a Conservative portfolio is less risky than a Growth portfolio. A riskier portfolio is associated with the potential for higher future returns, but also the potential for higher losses. A less risky portfolio won’t gain as much if markets rise, but also won’t lose as much if markets fall. You can see our different risk profiles below:

Our accredited Portfolio Advisors will personally review your portfolio recommendation to make sure it’s appropriate for you. In most cases, we won’t need to contact you, but occasionally we may need to give you a call to double-check some information.

After we review your portfolio, we’ll invest your money in low-cost exchange-traded funds (ETFs) that have the right mix of equities, fixed income and cash to match your risk profile. Our team of Portfolio Advisors continuously monitors your investments. If market conditions change, we’ll buy or sell ETFs to keep your investment portfolio on track (you can read more about the rebalancing process here (article: Managing Portfolio Drift)).

Remember that you always have the option of choosing to invest in a themed portfolio. Responsible Investing portfolios, for example, have the same risk profiles as our Standard portfolios (Very Conservative, Conservative, Balanced, etc.) but our Responsible Investing ETFs exclude certain companies (for example, those involved in tobacco and civilian firearms), and assess the remaining companies on how well they manage their environmental, social and governance (ESG) risks. You can read more about our Responsible Investing approach here.

Choosing what show to watch on Friday night can be hard, but investing shouldn’t be. Our goal is to make it easy for you to invest for your future, leaving you more time to binge-watch your next favourite series.