We’re talking about bubbles, but the VIX (the stock market’s fear gauge) is still above-average.
I think about that a lot 🤔
I think about that a lot 🤔
Seasoned investors will tell you that big selloffs happen when people least expect it.
History backs this up, too.
Since 1990 (when the VIX was introduced), the S&P 500 has gone through 12 drops of 10% or more.
10/12 of those drops started with the VIX below 20.
Since 1990 (when the VIX was introduced), the S&P 500 has gone through 12 drops of 10% or more.
10/12 of those drops started with the VIX below 20.
The two notable exceptions? The 2000 tech bubble bursting* and the Oct. 1997 10.8% drop.
*maybe that's a sign things are getting weird
*maybe that's a sign things are getting weird
BUT gold and fixed income markets are braced for pain, too.
And it seems like EVERYBODY is calling for a bubble these days.
And it seems like EVERYBODY is calling for a bubble these days.
My point? There are signs of over-excitement in the market. For sure. But there are also palpable signs of fear.
Fear can be a healthy dynamic.
Anxious investors tend to pay more attention to risks/hedge their portfolios (makes them less likely to sell).
Fear can also lead to more cash on the sidelines that may flow back into the market if there’s a pullback.
Anxious investors tend to pay more attention to risks/hedge their portfolios (makes them less likely to sell).
Fear can also lead to more cash on the sidelines that may flow back into the market if there’s a pullback.
Reader, are we just feeling lots of feels these days?
*walks away and stares into the window like Carrie Bradshaw after she quit smoking*
• • •
Missing some Tweet in this thread? You can try to
force a refresh
