How volatility can impact investments

  • 19 June 2020 (3 min read)

Volatility describes how much the value of an investment is likely to fluctuate over time. Volatility is a type of risk but also an inevitable, even essential, part of investing as asset prices need to move in order for investment returns to be generated. Investments which are expected to experience higher volatility generally offer higher potential rewards to compensate. So rather than aiming to avoid volatility altogether, it is important to consider how much you are willing to tolerate in the context of your overall investment goals and how you can aim to potentially manage it to that level.

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