How Risk Averse Are You? Here Are the Best Ways to Find Out?
All of the recent hype surrounding Gamestop, cryptocurrency, non-fungible tokens (NFTs), and meme stocks made me question –
is anyone risk-averse anymore?
is defined as avoiding risk. Pretty straightforward.
If you are a risk-averse investor, you will seek out investments with a low probability of declining in value.
You are a risk averse investor who is OK with lower returns and should seek out conservative investments.
You are likely close to retirement and value security over high potential returns.
You have an average and healthy amount of risk tolerance.
While you invest the vast majority of your wealth in stocks, it’s either in index funds and mutual funds or in a portfolio of dividend-paying stocks that have the right level of diversification.
You are not very risk-averse and are not afraid to gamble if the expected return and potential payoff are high.
While you may still invest primarily in the stock market if you have a low-risk aversion, you also have a high probability of investing in cryptocurrency and even day trading stocks.
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