MILLBURN, N.J. ( Stockpickr) -- Last week the markets endured a historical bout of volatility as global indices plunged around the world. Fears persisted as we entered the weekend only to be exacerbated by the Friday evening announcement that Standard & Poor's downgraded the long-term debt of the U.S. from AAA to AA+. Volatility surged as market participants bought insurance protection and began to panic.Volatility can be measured in several ways:
- Implied Volatility: This is the volatility level which is used to price individual stock and index options.
- Historical Volatility: This measures the realized or actual volatility of an individual stock or index over a defined period of time.
- Volatility Index: This is a weighted average of implied volatilities for several index options for a particular index. The most popular volatility index is the S&P 500 Volatility Index, or the VIX.
Procter & Gamble
Johnson & JohnsonJohnson & Johnson ( JNJ) is another company that produces products you can find in your bathroom, but its products also go beyond that into the medicine cabinet with pharmaceuticals and hospitals with medical devices. Like P&G, J&J consistently grows income in the mid-single-digit percentages. Not only does Johnson & Johnson have a more diverse portfolio of products and businesses than pure pharmaceutical peers, but it also has a far more stable stock price with lower historic one-year volatility of 12.61 than that of such as Merck ( MRK), at 17.27, Pfizer ( PFE), at 19.19, and Eli Lilly ( LLY), at 15.25. J&J, another of Buffett's top dividend stocks, was highlighted earlier today in " 5 Rocket Stocks to Buy on Selloff."
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