LeoGlossary: Risk Off

This is a market condition when investor sentiment is pessimistic. At these times, they will move away from risk. The sentiment comes from the outlook on the economy, geopolitics, and different industries.

During risk off periods, trades are exited with stocks and other high yielding financial instruments including cryptocurrency.

We also see low grade bonds and corporate debt sold during these times. Instead defensive assets are bought.

During this shift, US Treasury bonds are heavily sought. So is cash especially USD. Investors simply are not willing to expose themselves to much downside.

If stocks are held, it is dividend paying ones that provide some stability.

• LeoGlossary Main Menu

Posted Using LeoFinance Beta