Volatility is the rate at which the price of a stock increases or decreases over a particular period. Higher stock price volatility often means higher risk and helps an investor to estimate the fluctuations that may happen in the future. Investments that are considered the least volatile typically have a lower risk and tend to fluctuate less in value over time. Here are some examples of investments that are generally considered to be less volatile.
First, there’s cash and cash equivalents: Cash, savings accounts, and money market accounts are considered the least volatile investment options because their value remains relatively stable over time. They offer lower returns than other investment options and may not keep pace with inflation. Next up, bonds. Bonds are considered less volatile than stocks because they provide a fixed income stream and are typically less sensitive to market fluctuations. Of course, bonds carry their own risks, such as interest rate risk and credit risk. Index funds and ETFs are diversified investment vehicles that hold a basket of stocks or other assets. Because they are diversified, they are generally less volatile than individual stocks or other assets. Finally, real estate investment trusts (REITs) are companies that own or operate income-generating real estate properties. They are generally considered less volatile than stocks because they offer steady income streams through rental income.
It’s important to note that while these investments are generally considered less volatile than other options, there is no investment that is completely risk-free. The performance of any investment can be influenced by economic and market conditions, as well as other factors. It’s always a good idea to speak with your Sara-Bay Financial advisor or conduct your own research before making any investment decisions.
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The information in this article is a compilation pulled from a variety of sources which may include AI contributions. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.