Hope you don't mind my $0.02 worth re volatility. Low volatility co's and funds typically have low performance--which is probably one of the reasons why most funds are mediocre. I've done very well on NITE precisely because of its volatility.
Think about it. First, you have to assume the market as a whole will continue to trend up, and so will the company in which you are considering investing. If you don't believe in that upward trend, you should not be investing. Assume stock A, with a volatility of 1.0 will have an average upward slope of x. Over the same period of time, stock B, with a volatility of 2.0 will have an average upward slope of 2*x. If, in a one year period, A goes up 20% overall, B will go up 40% even with intermediate dips which are 2* those of A. Of course, you have to have a reasonably long investment timeframe and tolerance for the dips so that the trend can be realized, or do what I have been doing, trading in and out (Out for the moment).
Interestingly, brokers (at least the ones with which I used to be associated) are often likely to try to get clients to do a panic sell on short term dips. After all they make their money on commissions, and a. either take advantage of the lack of sophistication by investors, or b) have not much critical thinking re. investing and are as subject to panic selling as the investor.
Sorry if this was too basic for you, but I have long had a problem with the "experts" pushing low volatility as an investing commandment without also describing its limitations.
Good luck.
Jim |
