Volatility is a measure of how much a price moves around, usually expressed as the standard deviation of returns. High volatility means large, frequent swings; low volatility means a smoother path.
Why it matters
Two portfolios can reach the same destination — one on a calm road, one on a rollercoaster. The calmer one (lower volatility) is easier to hold through stress, which makes you less likely to sell at the worst moment. That is why risk-adjusted return — return per unit of volatility — matters more than raw return. See the Sharpe ratio.