A risk averse investor is an investor who prefers lower returns with known risks rather than higher returns with unknown risks. Risk averse is the description of an investor who, when faced with two investments with a similar expected return, prefers the one with the lower risk. Risk averse investors do not like taking risks. They prefer lower returns instead of higher ones, because the lower return investments have known risks. The higher return ones, on the other hand, have unknown risks.
Investors who are looking for "safer" investments typically invest in savings accounts, Bonds, dividend growth stocks and certificates of deposit (CDs) Risk-seeking investors, on the other hand, will do the opposite. They will try to invest in high-risk options like stocks, equities, etc.