Nervous Nellie

AAA

DEFINITION of 'Nervous Nellie'

An investor who isn't comfortable with investing and the risks associated with it. Nervous Nellies have very little risk tolerance. As a result, their investment returns are likely to suffer because they will only invest in very low-risk, low-return investments. Without taking on greater risk, Nervous Nellies may not be able to generate the returns they need to meet goals such as being able to retire.

INVESTOPEDIA EXPLAINS 'Nervous Nellie'

If a Nervous Nellie decides to take a chance on a higher-risk, higher-return investment like stocks, they will most likely sell the moment the market ticks downward. Investors who sell when their holdings decline in price might miss some bad moments in the market, but they are also likely to miss the upswings.

RELATED TERMS
  1. One Night Stand Investment

    A purchased security that was intended for a long-term investment, ...
  2. Loss Psychology

    The emotional aspects associated with investing and the negative ...
  3. Emotional Neutrality

    The concept of removing greed, fear and other human emotions ...
  4. Risk

    The chance that an investment's actual return will be different ...
  5. Panic Selling

    Wide-scale selling of an investment, causing a sharp decline ...
  6. Mobile First Strategy

    Mobile first strategy is trend in website development where designing ...
RELATED FAQS
  1. What are the risks involved with investing in a penny stock?

    Penny stocks are the stocks of companies that trade below $5 and generally off a major market exchange. Penny stocks trade ... Read Full Answer >>
  2. What risk factors should investors consider before purchasing a callable bond?

    A number of risk components should be considered in regard to any bond investment since bonds, like any investment, do carry ... Read Full Answer >>
  3. Which stage of the economic cycle is most favorable for the chemicals sector?

    The expansionary stage of the economic cycle is most favorable for the chemicals sector. Each of the chemical sector's separate ... Read Full Answer >>
  4. What is the difference between a company's annual return and its annualized return?

    For most investors, determining whether an investment in a particular company or mutual fund is worthwhile comes down to ... Read Full Answer >>
  5. Why would growth investors be attracted to the electronics sector?

    Growth investors gravitate toward the electronics sector because its higher-than-average volatility, particularly in the ... Read Full Answer >>
  6. What is the difference between expected return and variance?

    The expected return and variance are two statistical measures for analyzing investment portfolios. The expected return is ... Read Full Answer >>
Related Articles
  1. Investing Basics

    5 Tips For Diversifying Your Portfolio

    A diversified portfolio will protect you in a tough market. Get some solid tips here!
  2. Investing

    Tips For Investors In Volatile Markets

    Find out what to look out for when trading during market instability.
  3. Trading Strategies

    How To Avoid Emotional Investing

    Most investors buy high and sell low, but you can avoid this trap by using some simple strategies.
  4. Active Trading Fundamentals

    Digging Deeper Into Bull And Bear Markets

    Discover why it's important to know the characteristics of the two types of market conditions.
  5. Mutual Funds & ETFs

    Your Mutual Fund: It's Riskier Than You Think

    Fund managers often take on more risk than they should, putting business ahead of fund holders' interests.
  6. Investing

    The Art Of Selling A Losing Position

    Knowing whether to sell or to hold is tough. And no rule fits all. Find out what to consider.
  7. Active Trading Fundamentals

    Surviving Bear Country

    Stay calm, play dead and keep your eyes open for attractive valuations.
  8. Fundamental Analysis

    Young Investors: Should You Care About Dividends?

    If you're a young investor, you may want to consider a non-traditional approach to investing.
  9. Economics

    What are Pork-Barrel Politics?

    Pork-barrel politics is a form of patronage whereby politicians favor their constituents in exchange for benefits such as campaign donations and votes.
  10. Investing Basics

    How to Calculate Risk Premium

    Think of a risk premium as a form of hazard pay for risky investments.

You May Also Like

Hot Definitions
  1. Coupon

    The interest rate stated on a bond when it's issued. The coupon is typically paid semiannually. This is also referred to ...
  2. Redemption

    The return of an investor's principal in a fixed income security, such as a preferred stock or bond; or the sale of units ...
  3. Standard Error

    The standard deviation of the sampling distribution of a statistic. Standard error is a statistical term that measures the ...
  4. Capital Stock

    The common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents ...
  5. Unearned Revenue

    When an individual or company receives money for a service or product that has yet to be fulfilled. Unearned revenue can ...
Trading Center