Get more advice at Tony's archive . The word volatility is widely misunderstood. Many people equate volatility only with risk of loss. But volatility actually refers to any change in value, either up or down. In fact, volatility can be good.
Volatility helps long-term investors .
While the long-term trend of the market has been up, the market constantly goes up and down. Over the past 50 years we have averaged one 10 percent decline each year, and a 20 percent decline every three years. These temporary declines scare off traders and emotional investors but provide buying opportunities for long-term investors. Researching stocks and the market using c omputers and the Internet are worthless in volatile times. A recent study by UC Davis reviewed 66,456 active discount brokerage accounts from 1991 to 1997.