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Finance: What is Volatility? 77 Views

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What is volatility? In the world of investing, volatility basically means riskiness. It looks at the returns for stocks or indexes, and if they are all over the place, this signals high volatility. Because highly volatile investments see big changes in returns, they are obviously more risky.

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00:00
In finance allah shmoop what is volatility beta this thing
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that's the symbol for volatility on the street we mean
00:11
the wall one not the mean one and it is
00:14
so commonly used that the in crowd members just say
00:17
beta when they're referring to volatility unless they're from tennessee

00:21
in which case they say you ve all y'all all
00:24
right so here's a siri's of stock prices stamped each
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day that has lo ve all or low beta and
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here's a siri's that has high beta dead man's pulse
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versus rocky mountains Well what makes a stock volatile uncertainty
00:38
Think about it this way If everyone knew for sure
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what a given stocks earnings would be for the next
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ten years quarter by quarter and they also knew what
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the overall markets average earnings would be in a few
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other things like revenue growth and world conditions and we're
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going to be war inflation there wouldn't be a lot
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of guesswork The quote right unquote price today would be
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thirty two dollars eighty three cents and the quote right
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unquote rate of compounding would be eight percent in the
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stock would slowly go up but this rate but in
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non disney land riel life well nobody really knows much
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of anything So stockcharts look like this and nerve endings
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of wall street traders look like this Neither of them 00:01:19.771 --> [endTime] looked much like this chart So that's all you
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