The concept that an investor makes investment choices based on the risk and reward potential of investments, expecting greater return for greater risk, and seeking investments that offer the highest return for the least amount of risk.
Describes an investor who, when faced with two investments with the same expected return but different risks, prefers the one with the lower risk.
Investing conservatively. Also, wanting to avoid risk unless adequately compensated for it; the attitude of most investors. see also risk tolerance.