Volatility
Volatility measures how much an investment's price moves up and down over time.
1 min read Learning to Invest
What it means
Volatility measures how much an investment's price moves up and down over time. Large price swings mean higher volatility, while steadier prices mean lower volatility.
Example
A fund may fall 10% during a market correction before recovering over the following year.
Why it matters
Short-term price swings are a normal part of investing and don't necessarily reflect long-term value.
Volatility measures movement, not quality.
What's the difference between risk and volatility?
Volatility measures price changes. Risk is the chance of not achieving your investment goals.