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Investing foundations

Lesson 64 · Written for kid, teen, and little

How Bumpy Is It?

Volatility is how much a price jumps up and down over time.

The idea

Volatility means how much a price moves around. A calm investment drifts a little each day, while a volatile one might jump up 5% and drop 6% in the same week. Volatility is not the same thing as losing money — a bouncy price swings both ways, up as well as down. Knowing how bumpy something usually is helps you decide whether you could sit through the ride without panicking. 🎢

A

Words to know

5

Volatility

How much a price bounces up and down. A stock moving 5% a day is far more volatile than one moving 0.2%.

Swing

One move up or down in a price. Going from $40 to $46 in a day is a $6 swing.

Calm

Describes something whose price usually changes only a little. A savings account is about as calm as it gets.

Range

The gap between the highest and lowest price over some period. High of $52, low of $38, so the range is $14.

Percent change

How big a move is compared with where the price started. A $2 rise on a $20 stock is 10%; on a $200 stock it is 1%.

Try it — no accountMatch the pairs

Match each word to what it means.

0 / 4 matched

In the full lesson

  1. 1Match the pairs
  2. 2Work out the number
  3. 3Make the call

Vine has 107 lessons like this one, each written three ways so a 7-year-old and a 17-year-old both get a version that fits.

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