How Do You Choose an Investment? (plus, what's an ETF?)
The Stacking Benjamins Show
00:00
The Range of Returns - What's the Average Range?
Standard deviation is what's the range that it's going to swing between from whatever the average number is. So for example, if you looked at cash, you'd see cash has a return of, let's say, one with a range of 0.9 and 1.1. Stocks on the other hand have a average of 10 with aRange of minus 20. That means two thirds of the time you will be between minus 12 and plus 28. And I can even go another standard deviation, which is down another 20 a third of the time. This is a measure I think that helps decrease the freak out factor.
Play episode from 30:15
Transcript
