Glossary Term

Risk Appetite

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Risk appetite refers to how much risk an investor is prepared to take in their investments. An investor with high risk tolerance, is prepared to accept the risk of drawdowns in order to capture larger potential moves to the upside. As such, this type of investor will tend to have riskier assets in their portfolio (such as individual stocks) than an investor whose risk appetite is lower and may desire relatively safer investments (such as indices and ETFs).

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What is risk appetite? A Traders Expert explanation

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