« Tech sector gains, broader market lower | Main | Market ends mostly lower »

Aug30
Are you a risk averse or risk seeking investor?

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. dice.jpg

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.

If you enjoyed this post, be sure to sign up for the RSS Feed from this website.


0 Comments/Trackbacks




submit a trackback

TrackBack URL for this entry:

post a comment

Name, Email Address, and URL are not required fields.





Comment Preview

« Tech sector gains, broader market lower | Main | Market ends mostly lower »

Advertise

Related Resources

recent comments

    sponsored ads



    subscribe


    Prefer Email?
    Subscribe below-

    Enter your Email:


    Powered by FeedBlitz What's this?

    Current News

    Support This Blog

    blogroll


    business social media

    Use these fast growing business social media sites to promote your business, feature your products, spotlight your business leaders, create links, and drive traffic back to your company site, all for free!

    BIZZlogos - Add your logo - free link to your site
    BIZZphotos - Add photos of your products and people
    BIZZprofiles - Submit your profile and build your online visibility
    BIZZspotlight - Spotlight your business with free links
    BIZZvideos - Videos about businesses, products and business people.
    BIZZbites - "Digg" for Business - Submit your articles and posts

    Know More Media - Finance / Banking / Insurance

    know more media network

    View Network Map

    Network Feed List (OPML)

    Know More Media Network
    Feed


    we support unitus

    PRWeb

    Influencer



    GrowYourFunds is a member of the Know More Media network of business related blogs.

    Here are some current headlines from some of our business publications:

    ProductivityGoal

    CallCenterScript

    AdHurl

    TheBizofKnowledge

    LandingTheDeal

    CustomersAreAlways

    HealthCareVox

    BrainBasedBusiness

    TheInsurancePolicy

    MarketingBlurb