How much swing can you carry?

How the check counts

Eight questions, zero to three points per answer, 24 points at most. The questions fall into four fields: horizon with one question, capacity with three questions on the emergency fund, the loss you could carry and expensive debt, knowledge with two questions on securities and crypto-assets, behaviour with two questions on a crash and on how often you would look. Capacity therefore carries the most weight, and on its own it can account for nine of the 24 points. The total gives the profile: zero to eight points Cautious, nine to 14 points Balanced, 15 to 19 points Growth, 20 to 24 points Speculative. The bars show each field against its own maximum so that a strong field does not hide a weak one. The only thing saved is the last profile, in the memory of your browser, and nothing goes to a server.

The rule of thumb at the end names a range for the share of crypto-assets in your liquid wealth. These ranges are how this tool sorts things and they do not come from any supervisory authority. Neither the German nor the European supervisors name a percentage at which a share would be appropriate. The range is therefore expressly not a recommendation but a way of sorting things that you have to test against your own figures.

Why capacity comes before the wish for a return

Anyone forced to sell in a crash loses twice: once on the price and once on the time in which something could have recovered. That is why the check asks first about the things that force a sale at the wrong moment. One is the missing reserve: the German consumer advice centres (Verbraucherzentrale) advise a buffer of two to three months of salary in an account you can reach at any time. Another is expensive debt: overdraft interest is a certain cost, a price gain is not. And the third is the date on which the money will be needed.

The supervisors are blunt about it. The three European supervisory authorities for banking, securities and insurance warned jointly on 17 March 2022 that many crypto-assets are highly risky and speculative and that consumers face the very real possibility of losing all the money they put in. BaFin, the German financial supervisory authority, made clear on 22 August 2022 that crypto-assets are not covered by deposit protection and that investor compensation as a rule does not apply either. Neither statement is a forecast about prices. Both are statements about the setting: there is no safety net underneath.

Where the check stops

Eight answer cards are a self-assessment, not an advice session. The check does not know your income, your commitments, your tax position, your pension provision or the other investments alongside which a crypto share would make any sense at all. Nor can it test whether your answer to the question about minus 50 per cent would hold up: most people rate their own calm higher beforehand than it turns out to be on the day. The result is therefore a starting point for a conversation, not a decision. Investment advice may only be given by someone licensed to give it, and it takes a full picture of your circumstances. This tool does neither of those things and does not want to.

Frequently asked questions

Sources