The two terms loss aversion and risk aversion are well known in the investment world, but many investors consider these two terms to have the same intent and meaning. Let's discuss the differences between these two terms:
Loss aversion will have higher happiness when it can avoid losses/risks. compared to making a profit. Loss aversion has an impact from selecting/purchasing investment assets to the final decision.
As for risk aversion, when he encounters two or more investment instrument choices, he will avoid the highest risk with a level of return that is not much different. Risk aversion only impacts the initial purchase of investment assets.
Loss aversion will have higher happiness when it can avoid losses/risks. compared to making a profit. Loss aversion has an impact from selecting/purchasing investment assets to the final decision.
As for risk aversion, when he encounters two or more investment instrument choices, he will avoid the highest risk with a level of return that is not much different. Risk aversion only impacts the initial purchase of investment assets.
