Volatility

Volatility is a measure of how the price of an asset – be it a stock, an option or a fund - changes. Volatility tracks how much the price moves and also how fast it changes. Beta is a commonly used statistical measure that represents volatility, and the higher beta is, the greater the risk. There’s usually a reference index such as the S&P 500 and if a stock perfectly tracks the index, it is said to have a beta of 1.0. If it changes more than the index, be it on the up or downside, it is a high beta stock. For example, a stock with a beta of 1.5 means that historically, it has moved 150% for every 100% move in the benchmark index. Mutual funds nowadays provide free volatility measures so you can get a good feel for how stable the fund is year in and year out.

SunAmerica

Short Company Name: 
SunAmerica
Long Company Name: 
SunAmerica

Company Type: 
Insurance Company
Address
Street Address: 
21650 Oxnard St
City: 
Woodland Hills
State: 
CA
ZIP Code: 
91367
Country: 
USA
Phone Number: 
800-445-7862
Year Founded: 
1890

A Changing Variable Annuity Landscape -- What to Watch for in the Next Few Years

This is the second part of an interview with...

A Changing Variable Annuity Landscape -- The Consumer Perspective

This is the first part of an interview with Ryan Hinchey.

Ryan is a consulting...

Employers Cautious About Annuities in 401k Plans

Employers who offer 401k plans seem intrigued by the notion of providing an annuity option to employees who participate in the plans. Recent stock market volatility makes the prospect of stable, guaranteed income very attractive in theory: Given the stock market’s volatility, Silgan is one of a number of 401(k) plan sponsors seriously discussing adding an annuity option to their 401(k) plans. With most employees’ 401(k) accounts decimated, the idea of providing guaranteed post-...

Zvi Bodie on the Safety of Stocks in the Long Run

The notion that stocks are risky in the short-run but safe in the long run is a dangerous financial fallacy according to Boston University professor Zvi Bodie.

Professor Bodie has been communicating this view consistently for many years, and the financial crisis has provided strong support for his argument.

The gist of Bodie's view involves that impact that equity market volatility can have on people who are near retirement or recently retired. 

Bodie warns of the relationship between ...

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