What is Volatility?

Volatility… We’ve heard and used this word a lot this year, mostly in the context of it being generally on the increase.

A reasonable translation would be the movement both up and down of a particular asset from an average point. To translate a translation, how much an asset or investment is moving from its average.

Whilst we’ve heard a lot about an increased level of volatility this year, as always with investments and markets its important to maintain perspective and the below graph shows the relative volatility of the S&P 500 (representing US Market) this year in comparison to others. As is shown, it’s important to maintain perspective amongst the ‘noise’.

Wes Wilkes
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