Investors don't need a newspaper columnist to tell them that the last year has seen some terrifying stock market volatility.
After three years of exceptionally calm trading with only small day-to-day price movements, the Hong Kong stock market went crazy around about the end of July last year.
Suddenly prices began swinging wildly, with annualised 10-day volatility shooting higher, from a level typically between 10 and 20 per cent, to reach fully 100 per cent in mid-January 2008. It has since subsided, but at a shade over 20 per cent, stock market volatility remains well above the levels that prevailed for most of the last four years.
Of course, volatility cuts both ways. Ordinary investors, who tend to buy stocks and hold them (if only briefly) like periods of volatility during which the market climbs, and loathe and fear volatile times in which the market falls.
Unfortunately, however, volatility is unequally distributed. Experience tells us that markets tend to plod higher, then plunge lower, which means unusual price swings usually hurt rather than help the ordinary share buyer.
Clearly the level of market volatility is important. But working out what drives volatility is hard, and attempting to forecast it is fiendishly tricky.
Despite the difficulty, Gary Evans and his team of equity strategists at HSBC have had a go.