If you want a good and stable return on investment in the long term, then investors should avoid stocks that experience changes in value. When prices go up and down in an extreme way, the stock can be said to be “dangerous” to the return of profits in the long run as a whole and can also tire investors emotionally. Stocks with high volatility are very risky for investors who are approaching retirement age. That is because of the possibility of losing money quickly. Although high volatility has the opportunity to make more money, most investors should look for stocks with relatively low volatility and a track record of stable positive returns. Low volatility stocks are not always easy to recognize but can be found as long as you have a good understanding of what volatility is and how volatility can be measured. You can also go to http://www.volatility75.net/ if you still want to learn more about market volatility.
When determining stock volatility, it is not enough just to look at price movements. You also need to consider the volatility of other stocks in the same sector, as well as the movement of the stock market as a whole. Fortunately, there are actual volatility measurements that can give you an objective picture. The measure is called “Beta” which you can usually find when researching an online stock. In some cases, Beta numbers only compare the volatility of a company with a selected stock based on the Composite Stock Price Index, which can track the largest companies on the stock market.
Many financial analysts consider that shares in the Miscellaneous Industry (MISC-IND) sector have low volatility and strong returns. This sector includes companies that produce important products that are used daily, such as transportation equipment, clothing, and other necessities of our lives. As a result, these companies do not have extreme fluctuations in earnings, so their stock prices also tend to be stable.