Yo-Yo
What is Yo-Yo?
Yo-yo is slang describing volatility in the market.
How Does Yo-Yo Work?
In a mathematical sense, standard deviation is a measure of how much an investment's returns can vary from its average return. That is, it is a measure of how much the market for a stock is yo-yo-ing. The less a market or investment yo-yos, the less risk there is that its value will deviate from the expected value.
Why Does Yo-Yo Matter?
Yo-yos famously go up and down, though their owners usually think that is fun. In the trading world, yo-yo markets are rarely fun -- they create a lot of stress for investors, who worry their investments are going to lose value suddenly.
However, yo-yo markets also present tremendous opportunity, because what goes down often comes back up, just like a yo-yo (unless, of course, the string comes off or gets tangled, which euphemistically can happen in the trading world, too).
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