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What does 'Risk Seeking' mean

Risk seeking is the search for greater volatility and uncertainty in investments in exchange for anticipated higher returns. Risk seekers might pursue investments such as small-cap stocks and international stocks, preferring growth investments over value investments.That being said, risk-seeking investors should conduct even greater due diligence when considering a riskier investment, due to the increased implied risk of such investments.

BREAKING DOWN 'Risk Seeking'

Risk seeking might also describe an entrepreneur who is willing to give up the stability of salaried employment with another company to start his or her own company in the hope of a greater financial and/or emotional payoff. A risk tolerant investor, on the other hand, might seek more of a balance between risk and stability by including more value stocks and fixed income securities in his or her portfolio; a risk averse investor would focus mainly on investments with slow but steady returns.

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