Risk profiling is a process through which financial planners and advisers try to arrive at the optimal level of risk an investor can take in hisher portfolio. For risk profiling, planners and advisers use various objective and subjective methods, including question jective and subjective methods, including question naire which employ psychometric tools. The three important parts which are consid ered while risk profiling an investor are risk required to achieve an investor's fi nancial goals, the level of risks that an investor can afford to take in hisher portfolio and lastly, a psychological parameter to have an idea about the amount of risk an investor can withstand. As an investor you should have a fair idea about each of the three parts, and they should be realistic. At the same time, your financial planner should be able to help you correct any mismatch about risk and expected return that may creep in when you are investing for your future financial goals.