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 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. Investing

    What’s The Essence Of Smart Beta In Fixed Income?

    In essence, smart beta strategies seek to re-write index rules to capture factors, such as value, quality, or low volatility, in their stock portfolios.
  9. Investing

    Wizards Of Odd: A Trip To Tech Land

    I spent a couple of days in Silicon Valley, and here are some key lessons I learned after meeting with a number of tech CEOs and venture capitalist.
  10. Investing

    How To Invest Outside Your Comfort Zone?

    Sometimes, when it comes to investing, we have to step outside of our comfort zone and use investment tools to express a market view or specific outcome.

You May Also Like

Hot Definitions
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  5. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  6. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
Trading Center