What is Volatility?

Hi all! When talking about stock market investing, the word 'Volatility' can refer to how much the value of the investment changes, how quickly, and at what volume. There is a more technical definition of 'Volatility' that you can research, if you'd like. But for a starting investor, the basic principle is this: the stock market, and individual investments, can be 'volatile.'

To give the example of gas prices again--if the price of gas went from $2.20 to $10 for a gallon, in the space of, say, a week, we would call that pretty 'volatile'--that would be a big jump!

For stocks, it can be exciting to see big price changes like that over a short period of time. It can feel like gambling, for better or worse!

But for the purposes of this MGB Investing Starter Kit, we want volatility to be low. Slow and steady wins the race. For someone just starting their investment journey, it's better to choose an investment with less ups and downs.

With investing, there is always the possibility of losing your money, especially if you make quick decisions. So a 'slow and steady' approach makes it less likely that we will make that mistake.

Here's an assignment, if you'd like. Google 'S & P 500' and start to research that, and track the price.

As of this posting, the value of the S&P 500 is about 4,446. Please don't let that amount intimidate you. The way the industry has changed, it's now possible to invest with as little as $5 at a time.

Let's watch how the value of the S &P 500 changes over time! Let me know in the comments what app you use to track it, if you're willing? Or let me know if you have any questions about this? And as always, thanks for reading this!

--Leslie

Edit on 12/12/21

Today, according to the Apple Stocks app on my phone, the S&P 500 is at 4712…

Edit on 2/22/22

Today, according to that same app, because of news about Russia and the Ukraine, the S&P 500 is at 4269.20...

Edit on 6/27/22

Today, the S&P 500 is at 3911.18!! It has dropped by over 500 points since the first post in August 2021.

Edit three years later on 4/9/25

As I share in this post, the S&P 500 just closed at 5456.90.

Volatility indeed! Check out this post, Volatility part 2!

Let's keep watching....

Quick links:

What is The MGB Investing Starter Kit? is HERE

Step 1 in the MGB Investing Starter Kit process is HERE

Step 2 is HERE --Keep a 'Digit Tally', like You Need A Budget or RocketMoney or our free tracker template HERE

Step 3 is HERE

What is Investing? is HERE

To buy our self-paced investing course for $49, sign up by clicking HERE.

For the 90 min zoom class during Black History Month for $98, click HERE.

To register for our 6 month course, for $795, click HERE.

Disclosures

Equity through equities.