Defining your risk profile is the first step in selecting what asset classes are appropriate for you. It will help avoid a situation where you would otherwise be investing in assets that are in conflict with your individual needs and objectives. Risk is a relative measure and it is important to determine a time frame before making an assumption about the risks of a particular asset class. For example, if your investment timeframe is 10 years then it could be said that cash is a risky investment because history shows that cash will not keep pace with inflation. Similarly shares could be viewed as risky if investing for a short time frame, because of the volatile nature of share markets. You should consult your adviser so that your risk profile can be determined before investing.