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January 7, 2021 9:02 AM Kate Ashford - Forbes Advisor
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Updated:
January 8, 2021 10:06 PM
Most days, the stock market doesn’t see big moves higher or lower. Generally, indexes like the S&P 500 gain or lose less than 1% a day. But from time to time, the market experiences significant price changes, which professional investors refer to as “volatility.”
While heightened volatility can be a sign of trouble, it’s all but inevitable in long-term investing and it may actually be one of the keys to investing success.
Volatility Definition
Market volatility is the frequency and magnitude of price movements, up or down. The bigger and more frequent the price swings, the more volatile the market is said to be.