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Glossary entry · Trade-offs
Volatility
Definition
A measure of how much the price of an asset fluctuates over time, usually expressed as annualized standard deviation. High volatility means bigger swings in both directions; low volatility means a calmer ride.
Example
Cash has near-zero volatility; the S&P 500 has ≈16%/year; Bitcoin has ≈60%/year.
From the lessons
Lesson · 04
Volatility
This term appears in a longer lesson, where the idea gets the proper treatment with examples and a working visualization.
Read the lesson →Related
Trade-offs
Risk
The chance that an investment loses value — and how much it could lose.
Read →Diversification
Spreading money across many different things so no single one can sink you.
Read →Bull & bear market
Long stretches of rising prices (bull) or falling prices (bear). Both end, eventually.
Read →Drawdown
How far an investment falls from its peak before recovering. The pain measure.
Read →