Summary of Looking at Historical Risk: Standard Deviation and Beta

While no single risk measure can predict with 100% accuracy how volatile a fund will be in the future, studies have shown that past risk is a pretty good indicator of future risk. In other words, if a fund has been volatile in the past, it’s likely to be volatile in the future.

Standard deviation and beta, while not complete, are tools commonly used in the investing world for measuring the risk of investments. Become familiar with them.