what is risk on risk off 
risk on risk off investing relies on and is driven by changes in investor risk tolerance risk on risk off roro can also sway changes in investment activity in response to economic patterns when risk is low investors tend to engage in higher risk investments investors tend to gravitate toward lower risk investments when risk is perceived to be high high risk vs low risk investmentsinvestors appetites for risk rise and fall over time risk is the uncertainty associated with investments that may negatively impact a financial portfolio because younger investors have a long term time horizon they commonly take more risk in contrast investors close to retirement may choose conservative investments and vehicles with lower risk not all asset classes carry the same risk investors tend to change asset classes depending on the markets stocks mutual funds and exchange traded funds etfs are generally considered riskier assets than government issued bonds 1risk capital is the money investors devote strictly to trades exposed to a possible loss in value risk onasset prices commonly follow the risk sentiment of the market investors look for changing sentiment through corporate earnings macroeconomic data and global central bank action an increase in the stock market or where stocks outperform bonds is said to be a risk on environment risk on environments can be carried by expanding corporate earnings optimistic economic outlook accommodative central bank policies and speculation as the market displays strong influential fundamentals investors perceive less risk about the market and its outlook risk off