What is a disadvantage of high market volatility for investors?

High market volatility is characterized by significant price fluctuations in securities and can create an unpredictable investment landscape. One of the main disadvantages for investors is that it can lead to emotional decision-making. This heightened volatility often triggers fear or anxiety among investors, pushing them to make impulsive decisions based on short-term market movements rather than adhering to a long-term investment strategy.

When investors observe rapid price increases or decreases, they may react emotionally—either by selling at a loss out of fear or by chasing trends that have recently performed well, without proper analysis. This emotional response can detract from a rational assessment of investments, potentially leading to poor investment choices that can jeopardize financial goals.

The other options describe scenarios that do not accurately reflect the implications of high market volatility. Predicting stock prices becomes more challenging in turbulent markets rather than easier, and volatility does not contribute to a safer investment environment; rather, it increases risk. Additionally, volatile markets do not guarantee consistent investment returns; instead, they introduce uncertainty that can lead to swings in performance.