What Does the Volatility in the Stock Market Mean For Our Money?

By: Kristin Burke
By: Kristin Burke

The VIX.. or volatility index.. is a gage of movement in the market. On Friday it was close to 80-percent.. today the VIX fell back to a normal 25 percent range.

The Dow closed above 400 today on news of a bailout plan for Greece. Local financial expert Tom Muldowney says when we see massive declines like Thursday we get anxious.. and rush to sell.

But Muldowney thinks last week's movement is a short-term psychological blow. He says when it comes to your money.. it's best to stay the course.

"We are always going to live in an environment of volatility. The volatility is because of the day to day uncertainty of what is going to happen in the economy of the entire planet. You get paid for that volatility. That's why the payment on stocks are higher than they are on bonds or money markets."

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