THE GLOSSARY · RISK
Volatility
How wide an investment swings around its average. It is not the risk of losing: it is the price of the ticket.
By the Yoseri News desk · · 1 min read
Volatility — how wide an investment swings around its average return, usually expressed as an annualised percentage.
Two investments can post the same average return; the one that zigzags more is the more volatile. Volatility is not your enemy in itself — it is the price of the ticket. The trap is elsewhere: at equal return, the higher it is, the deeper your drawdowns, and the more nerve it takes not to sell at the worst moment.
The order of magnitude matters. A diversified equity portfolio moves in a far narrower band than a crypto-asset whose annualised volatility runs past 60%. On an asset like that it takes several years of data to tell a trend from plain noise — which is why an honest model shows low confidence rather than a prediction.
In Yoseri, annualised volatility is shown on the Investments page with the history available and the history it would take: when the second exceeds the first, the confidence shown is low.
Yoseri News is an educational publication. Nothing in this article is investment advice, a recommendation to buy or sell, or tax advice. Yoseri is registered as neither an adviser nor a dealer with any market authority.