Risk-On vs Risk-Off Markets

What this unit covers

Learn the risk-on and risk-off model, what typically rises and falls together in each mood, to read a day's moves across assets as one story instead of unrelated headlines.

By the end you will be able to

• Explain how one shared mood can move several asset classes together on the same day.
• Describe what happens to safe-haven assets versus shares during risk-off and risk-on.
• Recognise this pattern as a check on past moves, not a tool for predicting future ones.

How it starts: Three Headlines, One Evening

1. You check the market news on your phone this evening.
2. Shares fall sharply, gold hits a fresh high, the rupee slips against the dollar.
3. Are these three separate stories, or one?

Words you will meet

Risk-on

A mood of confidence where money flows into shares and growth-linked assets.

Risk-off

A mood of fear where money flows into perceived safety like gold and bonds.

Safe-haven asset

Something trusted to hold its value when fear rises, such as gold or government bonds.

In this module: Cross-Asset Thinking

1. Capital Flows Between Asset Classes
2. Risk-On vs Risk-Off Markets (this unit)
3. Correlations Across Markets
4. Building a Multi-Asset Perspective