Headlines are screaming the market has MORE risk than...this part is fuzzy... since the start of the bull market? the election? ever? Faced with the question do you believe your eyes or your theories, prudence may say the eyes have it!
Source: Yahoo Finance SPY historical data.
The above is a colorful and dense picture of the stock market, represented by the tradeable SPDR ETF price, AND its daily true range. True range is the day's high minus the low PLUS any gaps between trading days. This is a literal representation of how much and how fast the market can move over any one day.
True range as a percentage of price is on blue left axis and the SPY ETF price on the orange right axis. To my eyes, volatility in the last year or so is little different, and maybe lower, than during the course of SPY's trade history.
There are a number of days where the SPY range exceeded 6%, especially during the great recession, but recently the SPY has barely beat a 4% range!
Source: Yahoo Finance VIX historical data.
The much maligned VIX, a more complex measure of risk, on the long-term chart, above, reflects the same moderated levels of risk compared to past history. Market risk, as my eyes see it, is little different and maybe lower than it has been for the last 20 years.
Feel free to post comments.
Disclaimer: Posts are for education only and not investment advice, may be subject to change without notice, and, while prepared with care, may be subject to omissions and errors.
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