It is a controversial point whether the presence of speculators increases or decreases the short-term volatility in a market.

By contrast, he said, people who buy stocks over the long haul are compensated for short-term volatility through their higher returns.

But you're also confusing short-term volatility with long-term risk.

Though stocks promise a superior long-term return, their short-term volatility is high.

Mr. Atteberry said that despite the fund's short-term volatility, its approach was conservative.

There's so much opportunity for long-term growth if you can withstand the short-term volatility.

"As a consequence, we expect a considerable degree of short-term volatility" in yearly inflation rates.

A long-term strategy will not react to short-term volatility and will thus include less trading of financial futures.

That would still leave consumers vulnerable to short-term volatility in power prices.

Still, both tools can be used conservatively by investors who want insurance against short-term volatility without selling their stocks.