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Risk Off

Trading Term

In the realm of investing, “risk off” refers to a market environment where investors exhibit a preference for lower-risk assets, often due to heightened uncertainty or negative economic indicators. During such periods, investors typically shift their portfolios away from equities and other high-risk investments, opting instead for safer assets like government bonds, gold, or cash. This behavior is driven by a desire to preserve capital and minimize potential losses. Understanding the dynamics of “risk off” environments is crucial for investors, as it influences asset allocation strategies and can significantly impact portfolio performance. Recognizing these shifts allows for more informed investment decisions.

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