Despite the diminished volatility in the equities markets and the growing complacency in the current rally, wary investors have sought out alternative investment strategies, like low-volatility exchange traded funds, to hedge potential risks.
With the Knight algorithm induced flash crash, looming Eurozone crisis and presidential elections weighing on the minds of investors, many are keeping cautious with their investments, writes Dave Goodboy, V.P. of marketing for intrendX LLC, for Street Authority.
Meanwhile, the CBOE Volatility Index, or VIX – a widely viewed gauge for market volatility or risk – has been hovering around multiyear lows, and the S&P 500 is touching on its 4-year high.
As many investors remain cautious with their investments, some have come to expect a spike in volatility sooner rather than later.
“Remember, stocks are driven by perception,” Goodboy noted.