Lexicon

Term of the day

risk on, risk off

Risk-on, risk-off (RoRo) investing describes a process where investors move to riskier potentially higher yielding investments and then back again to supposedly lower yielding investments which are perceived to have lower risk.

Quite often risk-on, risk-off behaviour follows global markets, where periods of perceived low financial risk encourage investors to take risk, therefore creating a risk-on situation, and periods of perceived high financial risk cause investors to take less risk, creating ...