# What is volatility in investing?

> Quick answer · Last updated 4 July 2026

Canonical HTML: https://moneyguide.org.uk/answers/what-is-volatility-in-investing/
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## In short

How much an investment's price swings up and down. Shares are more volatile than cash; a 20%–40% equity fall in a bad year is historically possible before recovery.

Volatility is not the same as permanent loss — unless you sell during a downturn.

Longer time horizons absorb volatility better. Money needed within five years may suit lower-volatility assets.

See risk tolerance guide before choosing equity exposure.

## Related

- [Risk tolerance explained](https://moneyguide.org.uk/investing/risk-tolerance-investing-explained/)
- [What is risk tolerance?](https://moneyguide.org.uk/answers/what-is-risk-tolerance-investing/)

## Primary source

moneyhelper.org.uk/en/savings/investing

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.