VIX On Pace for 5-Year Low

The Volatility Index ($VIX) is on pace for its lowest close since June 19, 2007.

So is a low VIX good for stocks? A few years ago, I looked at the numbers and found that a very low VIX does provide some benefit for the market:

To the extent there’s a tipping point, it seems to be a VIX of 13. Above 13, the S&P shows an annualized return of 3.0%, below 13 it jumps to 14.1%. However, 13 is a very low VIX reading; it’s been below 13 about 18% of the time.

Posted by on August 13th, 2012 at 3:15 pm


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