How Risk Averse Are You? Here Are the Best Ways to Find Out

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All of the recent hype surrounding Gamestop, cryptocurrency, non-fungible tokens (NFTs), and meme stocks made me question – is anyone risk-averse anymore?

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The Definition of Risk

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Risk Averse Definition

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High-Risk Aversion

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You likely have a good handle on your personal finances but are not the gambling type.

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You are not very risk-averse and are not afraid to gamble if the expected return and potential payoff are high.

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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?

The Definition of Risk

According to Merriam Webster, the definition of risk is the “possibility of loss or injury.”

Risk Averse Definition

If you are a risk-averse investor, you will seek out investments with a low probability of declining in value.

High-Risk Aversion

You are likely close to retirement and value security over high potential returns. Bonds, certificates of deposit (CDs), and interest-bearing accounts appeal to you because of their stability and liquidity.

You likely have a good handle on your personal finances but are not the gambling type.

Moderate Risk Aversion

You are not very risk-averse and are not afraid to gamble if the expected return and potential payoff are high.

Low-Risk Aversion

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Risk Aversion: Why it Matters in Personal Finance

Understanding your level of risk aversion is a valuable step in ensuring you build an investment portfolio that suits your needs.

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