Risk Aversion
Definition
Investor preference for safety and capital preservation during periods of uncertainty, volatility, or fear, leading to capital flows out of risky assets and into safe havens.
Example
Rising risk aversion during a geopolitical crisis strengthens the U.S. dollar and yen while crushing emerging market currencies.
Related Terms
Frequently Asked Question
What is Risk Aversion?
Risk aversion is the opposite of risk appetite — investors flee risky assets to safe havens. Measured by VIX levels, bond yields, and EM currency moves. High VIX = peak risk aversion.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.