Risk profiles and intelligent weighting

What is your risk profile

Your risk profile decides how BurMarket weights your portfolio. It does not change which assets the AI tracks — it changes how much weight each one gets and what quality threshold we require before including them.

The system follows MiFID-light: 6 quick questions covering time horizon, experience, loss tolerance, equity exposure, goal, and age. You answer once and re-assess every 12 months.

Information, not financial advice. The questionnaire is a guideline tool — you decide whether to change your profile manually.

The 3 profiles

Conservative (score 0-70)

• Sector cap: 25%. No sector exceeds a quarter of the portfolio.
• Weighting method: sqrt_score (square root of opportunity_score). Flattens differences between assets → maximum diversification.
• Minimum score: assets with score ≥ 5/10.
• Positions: between 8 and 12.
• When it fits: you want to preserve capital, sleep easy, your horizon is < 3 years, or you don't tolerate large losses.

Balanced (score 71-140) — default

• Sector cap: 35%. Optional floor of 5%.
• Weighting method: pure_score (linear score). Reflects AI conviction with reasonable caps.
• Minimum score: assets with score ≥ 6/10.
• Positions: between 8 and 12.
• When it fits: 3-7 year horizon, balance between return and prudence, you accept moderate drawdowns.

Aggressive (score 141-210)

• Sector cap: 50%. Allows higher sector concentration.
• Weighting method: pure_score_top10 (linear, top 10 by score only). Follows AI conviction closely.
• Minimum score: assets with score ≥ 7/10.
• Positions: between 8 and 10.
• When it fits: long horizon (7+ years), you accept volatility, you seek to maximize return assuming risk.

How it applies to weighting

When BurMarket builds or rebalances your portfolio (personal simulator; House is fixed conservative), it applies this algorithm:

1. Filter the universe by your target_markets and excluded_sectors preferences.
2. Filter by score using your profile threshold. If not enough assets pass, relax the threshold by 1 step at a time until reaching minimum positions.
3. Select top N if the method requires it (top 10 for aggressive).
4. Compute weights with your profile's method (sqrt_score / pure_score / pure_score_top10).
5. Apply sector cap iteratively: if a sector exceeds the cap, it gets clipped and the excess is redistributed proportionally to non-capped sectors.
6. Apply sector floor if enabled (balanced).
7. Normalize and convert weights into shares based on price and available capital.

House operations replication

When the House (reference portfolio) makes a swap, your ghost (replicator) attempts to replicate it respecting your filters:

• If the asset is on a market you haven't enabled → the operation is skipped and recorded as filtered_by_user_target_markets.
• If the sector is in your exclusions → filtered_by_user_excluded_sectors.
• If it's a buy and the score doesn't reach your threshold → filtered_by_profile_threshold.

This means your ghost may diverge from the House: it's a feature, not a bug. You'll see the skips in the ghost decisions tab.

Re-assessment and manual changes

• The questionnaire expires after 12 months. We'll remind you to retake it.
• You can re-answer it anytime from My account → Preferences → Your risk profile.
• Changing profile does not automatically rebalance existing portfolios. If you want the new profile applied, reset the simulator from Preferences.

The House is always conservative

The Global House portfolio is locked to conservative regardless of any user's profile. It's our public reference portfolio — we want it to be stable, diversified, and honest as a benchmark.