What is Volatility?

Volatility refers to how much and how quickly the price of an asset (like stocks, real estate, or gold) moves up or down.

In simple terms — the more unpredictable the price, the higher the volatility.

Analogy:

Imagine you're on a boat.

• Calm waters? Smooth sailing. Predictable. Low volatility.

• Stormy waters? Up and down, unpredictable. High volatility.

Investments are like that. Some stay steady, some ride wild waves.

The VIX - Fear Gauge

Ever heard of the VIX?
It’s known as the Volatility Index or the "Fear Gauge" in the stock market.

• ✅ When the VIX is high, investors expect more market turbulence (high volatility).

• ✅ When the VIX is low, markets are calmer (low volatility).

During the 2008 financial crisis, the VIX hit a record high of 89.53. Investors were in full panic mode!

You can check the live VIX here: https://www.investing.com/indices/volatility-s-p-500

Fun Fact:

The most volatile day in stock market history was Black Monday on October 19, 1987, when the Dow Jones dropped 22.6% in one day.
👉 Even now, that day is remembered as a textbook case of extreme volatility.

Action Step:

Check your risk tolerance - If you find yourself panicking every time the market dips, your investments may have too much volatility for your comfort.