Lesson reading notes
Volatility — what risky actually means
Volatility is the size and speed of price swings.
Bumpy is volatile
Volatility describes how much and how quickly an investment's price moves up and down. A volatile investment can rise fast, fall fast, or both.
It is not the whole definition of risk
A smooth-looking investment can still have risks such as inflation, default, or lack of liquidity. Volatility is one visible risk, not the only one.
Your reaction matters
Risk is personal when a drop makes you sell at the worst time or miss a goal. Choose a level of ups and downs you can realistically tolerate.
Continue with Long-Term Investing lessons.
For education only. Quoliv uses fake money and does not provide personal financial advice.