Risk Numbers by State

Jason Zweig featured this data in his article, When Your Neighbors Move In to Your Investment Portfolio, for The Wall Street Journal.


Since 2013, advisors have been using the Risk Number® to quantify risk and empower fearless investing for their clients. When we decided to look deeper into Risk Number data, we had some questions about what we’d find: what kind of patterns would emerge city by city, or state by state? Would there be other differences we couldn't quantify? What if we've done all this scientific research and risk really is just the same old semantics? [spoiler: it's not]

Riskiest States

The average Risk Number by state ranges from as low as 52.86 to as high as 62.25, and we applied a multiplier to assign an extrapolated Risk Number to every state for illustrative purposes. The results were fascinating, and we're excited to finally share it with you.

Here's what we found:


Riskiest States

At first glance, these states could not be any more different. Geographically, they’re almost perfectly west, east, and center. So what makes these states so similar in their propensity for risk? Age could be one of those factors.

Nebraska

  • Nebraska has a fiercely independent streak that runs through its history. In the middle of the Great Plains, the state was first settled by pioneers looking to make a name out west as part of the Homestead Act. It also has the only unicameral legislature in the country—no easy feat in this political environment.

New York

  • New York has a population of 19 million—over 8 million in New York City alone. With an average income of over $58K a year, New Yorkers have a little more flexibility to take risks. And it’s only fitting that the home of Wall Street would be among the riskiest.

Alaska

  • As of 2018, Alaska, Nebraska, and New York have some of the lowest populations of residents aged 65 or older. In fact, Alaska ranks 50th with only 9.49%. When you see that Alaska contains about 98% of the U.S. brown bear population, a little more investment risk is small potatoes for the Last Frontier.

Least Risky States

The three least-risky states have some similarities, but some striking differences as well. Arkansas and West Virginia have two of the lowest median household incomes in the country and large mining communities, but Vermont’s median income is on par with some of the more risky states. How can that be?

Arkansas median household income: $41,995
Vermont median household income: $56,990
West Virginia median household income: $42,019

Vermont

West Virginia

  • West Virginia, like Arkansas, has a large mining community that didn’t see the growth other sectors experienced after the recession. It ranks 45th in Education, 49th in Economy, and is 50th in Employment. We believe risk is directly correlated to an individual’s current position, and unless changes occur, West Virginians will continue to be cautious.

Arkansas

  • Fun fact: Arkansas has the only active diamond mine in the US. The Natural State is also home to one of the biggest companies in the world, Walmart. However, Arkansas ranks 42nd in Education, 40th in Economy, and 41st in Opportunity. Arkansas investors just don't want to risk it.

We collected this data over seven years and are still discovering just how many outside factors contribute to an investor's Risk Number. Risk tolerance is such a multivariable dynamic that placing investors into subjective buckets based on their age simply doesn't cut it.

We believe investors are individuals, and our research has confirmed that belief time and time again.

So, how risky is your state?


Alabama  Risk 50


Arizona  Risk 46

  • 39th Riskiest
  • Ranked 12th in Infrastructure and 39th in Quality of Life
  • The copper dome of Arizona's capitol building is made with the equivalent of 4,800,000 pennies

California  Risk 56

  • 19th Riskiest
  • Ranked 4th in Economy and 50th in Quality of Life
  • Riskalyze was founded in Auburn, California

Colorado  Risk 60


Connecticut  Risk 41

  • 42nd Riskiest
  • Ranked 4th in Health Care and 41st in Infrastructure
  • Connecticut imposed the first speed limit for a motor vehicle in 1901, a blistering 12 mph

Delaware  Risk 55


Florida  Risk 36

  • 47th Riskiest
  • Ranked 15th Overall by US News
  • Rumor has it: Floridians are never more than 60 miles away from salt water

Georgia  Risk 62

  • 9th Riskiest
  • Ranked 10th in Growth and 45th in Health Care Access
  • Bank of America Plaza Atlanta is the tallest building in the southeast and home to Riskalyze's East Coast headquarters

Hawaii  Risk 48

  • 38th Riskiest
  • Ranked 1st in Health Care and 23rd in Economy
  • From 1847 to 1898, Hawaii had it own currency known as the dala

Idaho  Risk 50

  • 34th Riskiest
  • Ranked 12th Overall by US News
  • Idaho's most famous crop (potatoes) aren't native to the area—they're from New Hampshire

Illinois  Risk 51


Indiana  Risk 57


Iowa  Risk 57


Kansas  Risk 50


Kentucky  Risk 52


Louisiana  Risk 52


Maine  Risk 55


Maryland  Risk 67

  • 6th Riskiest
  • Ranked 2nd in Opportunity and 11th in Education
  • The official state sport of Maryland is Jousting

Massachusetts  Risk 55


Michigan  Risk 57


Minnesota  Risk 44


Mississippi  Risk 39

  • 44th Riskiest
  • Ranked 49th Overall by US News
  • The Old Spanish Fort Museum in Pascagoula, MS has the world's largest shrimp on display

Missouri  Risk 65

  • 8th Riskiest
  • Ranked 10th in Internet Access and 15th in Quality of Life
  • "Show Me" your neighbors—Missouri is bordered by eight different states

Montana  Risk 38

  • 45th Riskiest
  • Ranked 26th in Economy and 7th in Energy
  • Montana's Glacier National Park is the only place in the US where water flows to the Pacific, Atlantic, and Hudson Bay

Nevada  Risk 48

  • 36th Riskiest
  • Ranked 5th in Infrastructure and 44th in Education
  • Even though California is called the Golden State, most gold in the U.S. actual comes from Nevada

New Hampshire  Risk 50

  • 35th Riskiest
  • Ranked 5th Overall by US News
  • Live Free or Die: New Hampshire was the first colony to declare independence from England

New Jersey  Risk 37

  • 46th Riskiest
  • Ranked 2nd in Education and 49th in Fiscal Stability
  • The famous duel between Aaron Burr and Alexander Hamilton took place in Weehawken, New Jersey

New Mexico  Risk 36

  • 48th Riskiest
  • Ranked 8th in Quality of Life and 50th in Education
  • The first atom bomb was tested in Alamogordo, New Mexico in 1945

North Carolina  Risk 54


North Dakota  Risk 72

  • 4th Riskiest
  • Ranked 1st in Quality of Life and 2nd in Fiscal Stability
  • Being the #1 producer of honey makes life pretty sweet

Ohio  Risk 56


Oklahoma  Risk 58

  • 15th Riskiest
  • Ranked 9th in Social Environment and 48th in Health Care
  • 'Tis the season—Oklahoma's state flower is mistletoe

Oregon  Risk 60


Pennsylvania  Risk 40

  • 43rd Riskiest
  • Ranked 16th in Opportunity and 44th in Quality of Life
  • The Foxburg Country Club in Foxburg, PA is the oldest golf course in the US

Rhode Island  Risk 55

  • 23rd Riskiest
  • Ranked 8th in Public Safety and 8th in Health Care
  • Rhode Island is only 48 miles long and 37 miles wide

South Carolina  Risk 56

  • 21st Riskiest
  • Ranked 15th in Economy and 48th in Education
  • On April 12, 1861, the Civil War began at Fort Sumter in South Carolina

South Dakota  Risk 54


Tennessee  Risk 66

  • 7th Riskiest
  • Ranked 5th in Fiscal Stability and 46th in Public Safety
  • Major industries include mining, farming, music, and uranium products

Texas  Risk 59

  • 13th Riskiest
  • Ranked 8th in Economy and 26th in Energy
  • The Texas oil boom of the early 20th century is known as the Gusher Age

Utah  Risk 55


Virginia  Risk 60

  • 10th Riskiest
  • Ranked 7th in Pubic Safety and 41st in Growth
  • Virginia is the birthplace of the most US Presidents (8)

Washington  Risk 48

  • 37th Riskiest
  • Ranked 2nd in Health Care and 3rd in Economy
  • There are over 3,000 glaciers in Washington

Washington DC  Risk 72


Wisconsin  Risk 42

  • 41st Riskiest
  • Ranked 3rd in Quality of Life and 8th in Opportunity
  • Wisconsin produces 25% of the nation's cheese

Wyoming  Risk 59