Why is the Vix “fear” index approaching its all-time low?


Originally published at: https://whichinvestmenttrust.com/why-is-the-vix-fear-index-approaching-its-all-time-low/

As the VIX index approaches its historic low, The Share Centre’s Michael Baxter has been looking at what is driving investor confidence and considering if it has legs. At one point yesterday, the VIX index fell to just 9.56, against an all-time low of 9.17 set on December 23rd 1993. The index indeed closed at…


I think the Vix being this low is a sign of investors complacency. Interest rates being as low as they are when the economy in the USA and UK are growing, just would not happen if we were in anything like normal times.

We have no idea how Central Banks are going to unwind this crazy amount of QE they’ve issued. Personally, I keep a respectable sum of money squirrelled away in Armageddon investments (not quite but you get my drift).


Following losses of near £14,000 trading currencies in the early 1920s, the notable economist John Maynard Keynes reportedly made the comment “The market can stay irrational longer than you can stay solvent.” Having learned a valuable but painful lesson – markets can act perversely in the short-term – Keynes never made the same mistake again.

For those of us who take an interest in financial markets know, as sure as night follows day, that an index correction is lurking out there somewhere. Exactly when, where and what the trigger will be is the big unknown and is the “irrational” part of the equation that Keynes was referring to. In the meantime; all we as investors can do, as Keynes suggests, is to remain solvent as best we can and not get suckered into believing that it’s different this time.

History doesn’t repeat itself but it often rhymes