Investment Volatility and Beta

The term investment volatility is generally used to refer to how much the price of an asset varies between periods.  The typical period is normally a day, but it can also be weeks (weekly volatility) or months (monthly volatility). There are several ways to measure volatility.  One such way in the case of a stock is to refer to its

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Maximum Drawdown – MDD

Maximum Drawdown (MDD) is a very important measure of investment risk.  It measures the largest percentage drop in the value of a portfolio from a peak to a subsequent bottom before that portfolio value makes a subsequent new high.  Each peak to bottom drop is called a drawdown, and the MDD is the largest drawdown of them all. For example,

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Economic Cycle

In investment-speak, we typically refer to the economic cycle as the time frame that includes a period of expansion followed by a recession.

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