By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Breaking US News – USA Business MediaBreaking US News – USA Business MediaBreaking US News – USA Business Media
  • Home
  • USA
  • World
  • Business
    • CEO
    • Entrepreneur
    • Founder
    • Journalist
    • Realtor
  • Health
    • Doctor
    • Plastic Surgeon
    • Beauty Cosmetics
  • Sports
    • Athlete
    • Coach
    • Fitness Trainer
  • Cryptocurrency
  • Entertainment
  • Technology
Font ResizerAa
Breaking US News – USA Business MediaBreaking US News – USA Business Media
Font ResizerAa
  • Home
  • USA
  • World
  • Business
  • Health
  • Sports
  • Cryptocurrency
  • Entertainment
  • Technology
Search
  • Home
  • USA
  • World
  • Business
    • CEO
    • Entrepreneur
    • Founder
    • Journalist
    • Realtor
  • Health
    • Doctor
    • Plastic Surgeon
    • Beauty Cosmetics
  • Sports
    • Athlete
    • Coach
    • Fitness Trainer
  • Cryptocurrency
  • Entertainment
  • Technology
Follow US
Home » Blog » Why volatility matters – The Hindu BusinessLine
Business

Why volatility matters – The Hindu BusinessLine

Olivia Roberts
By Olivia Roberts
Share
3 Min Read
SHARE

Contents
Volatility riskConclusion

If trade were a game in a amusement park, the recent movement in the ingenious index could be classified as a roller diving mountain. These price movements hold their high -risk investment portfolio. In this article, we discuss why making active decisions about the portfolio is becoming more crucial than before.

Volatility risk

Suppose your investment has accumulated 50% yield in the last three years, and then the 33% market tanks. You will lose all your profits without eating. If you are more years old to achieve the objective for which investments were assigned, you can recover some of the losses. But can you accumulate enough wealth in time to achieve your goal?

When the main yield of its investments is capital appreciation, it must take into account how volatility (price fluctuations) can damage the value of its investments and, therefore, its life objectives. A purchase and retention strategy may not work in such volatile markets, even if it has a long time horizon to achieve its objective. This argument is true if it invests in active or liabilities (ETF and index funds). Because?

The portfolio manager of an active fund can decide when to obtain profits in values ​​held in the portfolio. But while remaining invested in the background, profits in heroes units are not abundant.

As for passive funds, the risk is higher since the fund administrator will not have profits even if the market is too expensive. Therefore, when you invest in active or liabilities, you must continually administer your investments in the fund.

Conclusion

It can moderate the impact of volatility by having a default rule to obtain profits in its capital investments. Suppose you want a minimum annual yield or 13%. If the yields are greater than 13% in any year (say 15%), you must sell units to capture excess yields (two percentage points). You must also be willing to buy more units when the market is blocked due to global events (at macro level). This is possible if you have cash in your portfolio, especially killing volatile markets. But take into account the reduction of its capital allocation if it is within 15-10 years from its retirement.

For all other objectives, it is enough to reduce the allocation when it is within five years since the end of the temporal horizon for that goal.

(The author offers training programs for people to manage their personal investments)

Posted on April 28, 2025

Share This Article
Facebook Copy Link Print

Fast Four Quiz: Precision Medicine in Cancer

How much do you know about precision medicine in cancer? Test your knowledge with this quick quiz.
Get Started
Rahul Yadav Indian Entrepreneur | India’s Mastermind of IT Innovation

In a time when technology reshapes every aspect of life and business,…

Apple’s ‘Friday Night Baseball’ is back on March 28 with a World Series documentary in tow

Apple's offered Major League Baseball games through the Apple TV app since…

10 Benefits of Forex Hedging Most Traders Don’t Know About

Hedging is possibly the most misunderstood trading method in the world. It's…

Your one-stop resource for medical news and education.

Your one-stop resource for medical news and education.
Sign Up for Free

You Might Also Like

Business

Tax Query: LTCG liabilities on MF sale for a pensioner

By Olivia Roberts
Business

Google loses online ad monopoly case. But it’s just one of many antitrust battles against big tech

By Olivia Roberts
Business

SBI Cards Q4 PAT down 19% to ₹534 crore

By Olivia Roberts
Business

Share Market Live Updates 23 April 2025: Stock to buy today: KIMS (₹683.40) – BUY

By Olivia Roberts
Breaking US News – USA Business Media
USA
  • USA
  • World
  • Technology
  • Cryptocurrency
Business
  • CEO
  • Founder
  • Journalist
  • Entrepreneur
  • Technology
Health
  • Doctor
  • Beauty Cosmetics
  • Plastic Surgeon
Sports
  • Coach
  • Fitness Trainer
  • Entertainment

© 2017-2025 usabusinessmedia. All Rights Reserved.

Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?