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 - Get Report) 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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