glossario

In finance, it refers to a preference for less risky investments (with relatively stable or low-volatility returns) compared with riskier investments (with highly variable returns, both positive and negative). Someone who is very risk-averse will prefer less risky investments, such as short-term government bonds, over riskier investments with higher expected returns, such as stocks. Risk aversion depends on both subjective factors, such as the investor's personal preferences or expectations about their future, and objective conditions that can change over time, such as personal wealth, the success of previous investment transactions, and economic uncertainty.