Buying shares in a company is risky. The main risk is that, as a shareholder, you are last in the queue to get paid your share of the profits, or of the assets if the firm goes bust. Shareholders accept this risk because they also stand to make bigger gains than anyone else if the firm does well.
But there’s another form of risk that’s arguably less well understood: volatility. In plain English, volatility measures how much of a roller-coaster ride an investment gives you. And shares – even big blue chips – can be very volatile. The returns from the [...]
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