Didier Saint Georges: Volatility is not to be feared

Financial markets often undergo rapid, erratic swings that are neither large in magnitude nor clear in direction. Such volatility is the tangible expression of investor uncertainty at a given point in time and can be measured, by calculating the magnitude of asset price fluctuations. So asset managers often use volatility as a proxy for risk. But that has caused confusion in the minds of many investors. While it is true volatility is a measure of uncertainty, investors often - and mistakenly - take it as a red flag. But in financial markets, just as in daily life, the fact that something...