Chris Hibbard's LTM E-Newsletter - September/October 2025 - Risk And Volatility: Know the Difference

Christopher R. Hibbard, ChFC^®, CRPC^®, CFS^®

Vice President, Wealth Management

Teachers Investment Services

Located at Teachers Federal Credit Union

5439 Sunrise Highway

Holbrook, NY 11741

Phone: 631-698-7000 Ext. 6020

Email: christopher.hibbard@lpl.com

CRPC conferred by College for Financial Planning.

September/October 2025

Risk And Volatility: Know the Difference

You may think of volatility and risk as interchangeable terms, but they're not. Picture volatility as a two-way thoroughfare. Just as a car on that road can go in either direction, the price of an investment can go up or down over time. That's volatility. Risk is a one-way street. It's the possibility that an investment will decrease in value and its price will drop. So, while volatility encompasses both the upside and downside of changes in the price of a security, portfolio or market segment, risk refers only to the potential for an investment to lose money.

Another Way to View It

Volatility is an objective measure of an investment's price fluctuations over a specific period. Volatility can be positive over the long term but risky in the short term.

Risk is subjective and personal. It's different for every investor. Some investors believe they have a high tolerance for risk until they see their portfolio's values drop.

Taming Risk and Volatility

Although taking some risk is necessary to earn returns that outpace inflation, there are strategies investors can use to cushion the impact.

Asset Allocation and Diversification

Start by defining your goals — short and long term — and determine your level of comfort with market risk. Then invest in asset classes that perform accordingly. For example, if your goal is long-term growth and you are comfortable with a certain level of risk you may invest more funds in stocks. To help reduce the impact of market swings, diversify your investments within each asset class.

Dollar-cost Averaging

Investing a fixed amount of money on a regular basis — regardless of share price, allows you to purchase securities in a variety of market conditions and may result in a lower per-share price. If you invest through a 401(k) or other qualified retirement plan, you may already be using this strategy. Understand that it is not possible to guarantee future results or guarantee against loss of principal. Your financial professional can provide guidance.

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Christopher Hibbard is a financial advisor with, and securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Teachers Federal Credit Union (TFCU) and Teachers Investment Services are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Teachers Investment Services, and may also be employees of TFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of, TFCU or Teachers Investment Services. Securities and insurance offered through LPL or its affiliates are:

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