Over the years, office towers have gotten taller and the elevators inside them faster. The same is taking place in the stock market. Thanks to the booming economy, changes in the tax code and trading technology, more investors and traders are joining the crowd. As a result, stock prices are rising, but so is volatility. Investor's Business Daily gauged intraday swings in the Nasdaq composite by computing the percentage spread between the index's daily highs and lows since 1982.
Volatility differs greatly from sector to sector and from stock to stock.
Still, investors who time their buys properly and know how much their stocks can swing in price improve their chances of staying with a winner through its gyrations. Beta ratios in great stocks can run as high as 4.00. But go with a wild stock if its volatility pushes it higher. Many charting services calculate both ratios. Buying at the right moment is the best defense against a volatile market.