What Is Volatility?
Oxford Dictionary:
Liability to change rapidly and unpredictably, especially for the worse.
Finance:
Volatility is the degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns.
Historic volatility : measures a time series of past market prices.
Volatility effects on assets:
Volatile assets are often considered riskier than less volatile assets because the price is expected to be less predictable.
Volatility effects on investors:
The wider the swings in an investment's price, the harder emotionally it is to not worry..!
How to handle the volatility???
Let's learn from legends
George Soros:
When a long-term trend loses its momentum, short-term volatility tends to rise. It is easy to see why that should be so: the trend-following crowd is disoriented.
Jim Simons:
When market volatility surged, Renaissance’s system tended to automatically reduce positions and risk.
Question:
Are you smarter than Jim Simons?
If your answer and trading track record show, you are not, decrease your exposure to the market!
If your answer is Yes: You will be washed out from the market soon...
Reference Article:
Best,
Dr. Moshkelgosha M.D
DISCLAIMER
I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.
Oxford Dictionary:
Liability to change rapidly and unpredictably, especially for the worse.
Finance:
Volatility is the degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns.
Historic volatility : measures a time series of past market prices.
Volatility effects on assets:
Volatile assets are often considered riskier than less volatile assets because the price is expected to be less predictable.
Volatility effects on investors:
The wider the swings in an investment's price, the harder emotionally it is to not worry..!
How to handle the volatility???
Let's learn from legends
George Soros:
When a long-term trend loses its momentum, short-term volatility tends to rise. It is easy to see why that should be so: the trend-following crowd is disoriented.
Jim Simons:
When market volatility surged, Renaissance’s system tended to automatically reduce positions and risk.
Question:
Are you smarter than Jim Simons?
If your answer and trading track record show, you are not, decrease your exposure to the market!
If your answer is Yes: You will be washed out from the market soon...
Reference Article:
Best,
Dr. Moshkelgosha M.D
DISCLAIMER
I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.