Volatility
How much and how sharply an investment's value moves up and down.
Often used as a synonym for risk, which is not quite right. Volatility is movement. Risk is the chance of a permanent bad outcome.
For someone with decades ahead and no need to sell, volatility is uncomfortable rather than dangerous — a fall you can wait out is not a loss. For someone who must sell next year, the same movement is a genuine risk, because the timing is not theirs to choose.
It is the price of the return. An investment that never moved would pay what a savings account pays, because there would be nothing to compensate you for.
This is why the useful question is never “how volatile is it?” but “when will I need this money?”
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