Some investors simply cannot stomach taking very much risk, while other investors love to take risks to try to maximize their investment returns. Are you a risk averse investor or a risk seeking investor?
Someone who is risk averse is defined as a person who is said to prefer less risk to more risk, all things being equal. An investor who is risk seeking is someone who is attracted to risk, and chooses investments with more risks. 
Understanding whether you are risk averse or risk seeking is important in your quest to grow your funds through investing. Those who are risk averse are far more likely to end up selling out of the stock market during turbulent times, which is precisely why they need to have the proper portfolio to start with.
The legendary mutual fund manager Peter Lynch said it best when he said "The key to making money in stocks is not to get scared out of them." Lynch had it exactly right. Stocks will make you money over the long run, but can you stomach the volatility enough to hold on? If you are a risk averse you have to find ways to be in the market that decrease your volatility. If you are a risk seeking investor you will likely want to find some of the highest growth companies and worry less about valuation and more about potential.
I think all things considered equal, most investors are at least somewhat risk averse. The tougher question is, given the chance for greater long-term returns are you willing to take increased risks?
In the next few weeks I am going to have a couple separate posts on this same topic. First I will examine investment possibilities for the risk averse investor, then I will examine the same for a risk seeking investor.
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