Spaghetti For Everyone In The Know, Pasta for The Rest - a podcast by Fixed Cost Financial

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The standard deviation essentially reports an investment's volatility, which indicates the tendency of the returns to rise or fall drastically in a short period of time. Volatile securities are considered higher risk because their performance may change quickly in either direction at any moment.  Watching what the professionals, not the typical talking head on the lamestream news, says about a hurricane, is exactly what true, fiduciary-based investment advisors and managers do every day.  The standard deviation essentially reports a fund's volatility, which indicates the tendency of the returns to rise or fall drastically in a short period of time. A volatile security is also considered higher risk because its performance may change quickly in either direction at any moment. If two people each receive a 9% annual return, but one is unhappy, it may be the result of their focus on short-term volatility.  Sam sees his money go up by 20% and down by 10%, on a monthly basis, during the year, ending at 9%.  Joe sees his money settle at 9% but it's never more than 2 or 3% up or down in any one month.  Sam will be frazzled.  Joe, if he ignores the market and understands that he's in it for the long term, well, he'll be fine. 

The same with hurricanes.  You need to be prepared and ready to bug out.  Joe, he has cash and is not married to his stocks.  Sam, well, he's a worry-wart and he'll die sooner than Joe because of stress.  Relax, it is what it is and it will be fine if you stick with the basics. 

DISCLAIMER:

Connecting Dots is a production of Fixed Cost Financial, the home of fixed cost investing. All rights reserved.  Re-broadcast or distribution prohibited without express written authorization. Connecting dots is for educational use only.  Investment Performance Is Not Guaranteed. Past performance is not indicative of future results. This broadcast does not take into account your particular investment objectives, financial situation or needs.  Nothing should be construed as an individual recommendation. Always read and all applicable information carefully before making an investment decision. Investments are not bank guaranteed, not FDIC insured. and may lose value. Due to our extensive holdings and that of our clients, you should assume that we have a position in all companies discussed and thus a conflict of interest should be assumed. 

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