Risk Lover


DEFINITION of 'Risk Lover'

An investor who is willing to take on additional risk for an investment that has a relatively low expected return. This contrasts with the typical investor mentality - risk aversion. Risk averse investors tend to take on increased risks only if they are warranted by the potential for higher returns.


There is always a risk/return tradeoff in investing. Lower returns are usually associated with lower risk investments. Higher potential returns are associated with investments of higher risk, as most investors expect to be compensated for taking on additional risk. Risk lovers, however, go against this principle: they acquire investments of higher risk with a lower expected return.

  1. Risk Curve

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  2. Risk Tolerance

    The degree of variability in investment returns that an individual ...
  3. Risk Neutral

    Indifference to risk. The risk-neutral investor would be in the ...
  4. Risk Averse

    A description of an investor who, when faced with two investments ...
  5. Risk-Return Tradeoff

    The principle that potential return rises with an increase in ...
  6. Risk

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