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.

Sun Life yet another Casualty of Equity Market Volatility

Canadian insurer Sun Life recently announced that it will exit the variable annuity and individual life insurance markets in the United States. Continued equity market volatility has resulted in a variable annuity business that is plagued with uncertainty and higher costs. Insurers such as Sun Life offer guarantees that are linked to the performance of underlying equity portfolios. These guarantees are a liability for the insurance company , and equity market volatility contributes to the cost...
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Why Indexed Financial Products are Appealing

I am currently researching and am likely to purchase an indexed universal life insurance product.  This first-hand research and learning process...

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Sun Life Financial Warns on Third Quarter Earnings

The following is a summary of stories related to the recent earnings warning from Canadian financial services company Sun Life. <a href="http://storify.com/tcochrane/sun-life-financial" mce_href="http://storify.com/tcochrane/sun-life-financial" target="_blank">View "Sun Life Financial Warns on Third Quarter Earnings" on Storify</a>

Market Gyrations Cloud the Larger Picture

A very interesting article from Financial Times columnist David Stevenson suggests that investors are making the very common mistake of missing sight of the forest for the trees. In this case, the trees are the daily ups and downs of the stock market. Market volatility naturally draws many people into a sort of short-term obsession with undulating asset prices and portfolio values. Stevenson makes that very valid point that this short-term obsession obscures larger, longer-term and likely...
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Does Buy and Hold Now Require a Floor?

The Wall Street Journal recently published an interview (see the video below) with entrepreneur and Dallas Mavericks owner Mark Cuban.

The interview is interesting for a number of reasons.  Cuban talks about investing his own money and he offers some suggestions for regular, non high net worth investors. 

In a nutshell, Cuban strongly believes that the “buy and hold” approach to investing is a worthless strategy.