What it is:
A risk lover is an investor who has a high propensity to engage in risky. A risk lover is the opposite of a risk-averse investor.
How it works/Example:
Let's assume you are considering purchasing some gain (and the probability of loss) is also high.
There are many ways to measure the risk associated with a security or an strategy, and Beta is among the most common.
Why it matters:
Being a risk lover is good and bad. The returns can be far higher, but when it's inappropriate for an investor to risk losing (for example, if the investor is planning on retiring soon or must a child through college soon), there is little time to recover from any losses. Thus, sometimes it is more appropriate to be risk averse.