In the short run, there’s not a wide difference in outcomes; notice how after year three or so the portfolios are tracking fairly closely. But after about the tenth year they begin to diverge quite a bit. And after 30 years, the differences are dramatic. The 10% volatility portfolio has more than $3.7mil but the 25% volatility portfolio has only $1.8mil.

RichKat Investing puts volatility front and center for you to make your investment decisions. Get started and create your portfolio and see how volatility is affecting your returns and learn how to reduce volatility.

All four of the lines above represent an average 5% return. The only difference between them is how much the returns fluctuate from year to year. In the case of the 10% volatility example, with 5% as the average return, you oscillate between a +15% one year and -5% the next. Specifically, each line is represented as shown on the right —->