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Quiz: Do Your Investments Match Your Job?

The unemployment rate is higher than it has been in 25 years, and everyone from the White House to Wall Street warn that it could get worse. The last thing you want in such an insecure job market is a portfolio of investments to make you even more insecure. That's why a growing number of advisers counsel you to take your job into account when you choose your investments. If you have a lot of job security and a steadily rising income, then, sure, it's okay to put more money into stocks in hopes of capturing a higher return. But advisers warn that if your income moves in cycles that track the ups and downs of the economy, you'll want to lean more towards bonds and money funds, which add a layer of stability your job might not.

That leaves one key question: How do you judge whether your job is one of the safe ones or one of the risky ones? Well, that’s where this one-minute quiz comes in. It was developed by Moshe Milevsky, a finance professor at Toronto’s York University and author of Are You a Stock or a Bond?, the book that inspired many planners to rethink the role of your job in how you invest. Keep track of how many times you answer yes; we’ll tell you what it means when you’re done.

1. Did your income decline in the last 12 months due to the financial crisis?

2. Does 75 percent or more of your total annual pay come from commissions and bonuses?

3. Do you work for a large publicly traded company that is followed by Wall Street? Such companies are likely to lay workers off quickly when the economy turns bad. So if you answered yes, your job could be less secure than it would be otherwise.

4. Do you see many billboards, advertisements, and TV commercials for your employer? Companies in the public eye tend to be closely watched by Wall Street, too. That can be rough on job security. See question 3.

5. Do you use any of these words more than twice a day in the course of your daily job: interest, credit, default, liquidity, or margin? If you work in or close to the financial services industry, you’re likely to see your income or job security rise and fall in step with the stock market, at least to some extent.

6. Do you feel that everything you learned in college is irrelevant to your daily job? If you trained in college for your eventual job—as is the case for doctors, dentists, engineers, scientists, and so on—you’re likely to have a more stable career.

7. When you come to work on Monday morning, do you often wonder if you’ll still be employed by Friday?

8. Do you wear a suit to work? If you do, you’re probably not a member of a union. But union members tend to have more income and job security than other workers.

9. Do you have a traditional pension—that is, the kind that pays you a check for life after you retire? Jobs that offer old-fashioned pensions tend to be more secure and offer more stable income.

Scoring: If you answered “Yes” to five or more of these questions, then your income and your job security are likely to be at risk at the same time the stock market goes down. You should offset that risk by making sure that your savings, 401(k), IRAs, and other investments tilt towards bonds and money funds, which tend to hold their value when stocks get weaker. If you answered “No” to five or more of these questions, then your job is safer and more secure, and you can feel more confident about taking the risk of investing in the stock market in hopes of getting higher returns in the long run.

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