Annualized Volatility

What it means: This measures how much your returns move up and down on average in a year.

In plain terms: It’s a measure of risk, how “wobbly” your investment is.

Example: If your share price jumps 10% one week and drops 8% the next, that’s high volatility. If it steadily inches up a little each month, that’s low volatility.

Bonds vs Equities vs Crypto:

• Bonds: Low volatility. They move slowly and predictably.
• Equities: Medium volatility. Prices bounce around daily but often trend upward.
• Cryptos: Sky-high volatility. You might see double-digit moves in a single day.

How to use it: Annualized volatility should never be looked at in isolation. Pair it with annualized return to understand your risk–reward balance. If volatility spikes, it’s worth digging deeper, markets might be shifting. Stay calm, though, short bursts of volatility don’t necessarily mean trouble. But consistent increases may signal time to rebalance.