Volatility

What this video covers

• Why volatility is not the same as loss, and how a volatile product can still produce high average returns over a long period
• The volatility ranking of Series 6 products from money market funds (very low) through sector funds (high), including where high-yield bond funds and variable annuity sub-accounts sit
• Why money market funds maintain a stable $1.00 Net Asset Value (NAV) and when that stability makes them the right recommendation
• The exam trap that high-yield (junk) bonds carry credit risk despite the word "bond," and why they are unsuitable for risk-averse profiles
• Why variable annuity volatility comes from the sub-accounts, not the insurance contract wrapper, during the accumulation phase
• The order of operations for matching volatility to customer profiles: time horizon first, then liquidity needs, then risk tolerance
• Standard deviation, alpha, beta, and the Capital Asset Pricing Model (CAPM) as portfolio theory terms to recognize, not calculate