Risk-Averse: Why do some investors prefer to sleep well at night?

Have you ever stopped to think about why some people sleep soundly while others spend sleepless nights monitoring their wallets? It all has to do with risk aversion.

What does it mean to be risk-averse?

In short: it is when you prefer to keep your money safe rather than risk everything in the hope of getting rich. While volatile investments can make you a millionaire or bankrupt, conservative ones grow slowly but securely.

The Mathematics of Fear

Low-risk investment:

• Predictable and stable return
• Minimum risk of losing the principal
• Earnings generally accompany inflation
• Example: CDs, bonds, blue chips

High-risk investment:

• It can yield a lot or destroy your savings
• Volatility is the game
• Opportunity for exponential gains

The real dilemma

Being cautious protects your money, but it comes at a cost: you leave on the table returns that could make a real difference. It's like choosing between guaranteed safety and potential wealth.

Where are the assets now:

• INJ down -4.02%
• NEAR down -2.86%
• FET at +0.32%

In the end, the question is: do you sleep better with a guaranteed 3% return or do you prefer the adrenaline ( and the risk ) of seeking 30%?