Friday, January 15, 2010

VIX At Lowest Level Since 2008...



Now that the VIX Index is at its lowest levels since May 2008, and down nearly -80% from its record high in late 2008, there is a growing concern among some investors that there is not enough fear in the marketplace.
  
As the chart above indicates, the current level of 17.6 is lower than the long-term average of 20.3 since 1990.

However, during the mid-nineties and the middle part of this decade, which were both good periods for equity investors, the VIX not only traded at and below current levels, but it also remained at those levels for several years.


While the VIX's decline over the last year indicates that investors are not as fearful as they were a year ago, can you blame them for not being so?

While conditions haven't quite returned to normal, they are a lot closer now than they were then.

Chart and analysis courtesy of Bespoke Investment Group



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