From the course: Build Your Financial Literacy
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Volatility and inflation
From the course: Build Your Financial Literacy
Volatility and inflation
- You can make the best investment choices in the world, but money can have a mind of its own. In this lesson, we'll talk about two things that affect the health of your investments. Volatility and inflation. Volatility is a form of measurement that represents how large of a swing in price you'll see for your investment. Volatile assets are often considered riskier because their price is expected to be less predictable. For example, owning a stock in a tech company has a higher level of volatility than a government bond, because that company may not be popular tomorrow and could lose value, while the government, they'll continue to make interest payments to you on the bond. Remember, the more volatile a product is the higher your risk and the higher your returns and profit or the higher your losses. Now, inflation is the rate at which the general level of prices for services and goods happens to keep rising. When that…
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