Take a look at the chart below... This is exactly what we’re looking for. It’s exactly what happened before stocks melted up in the late 1990s. Investors hit a patch of fear... stock prices fell... but then they recovered. They reached new all-time highs and continued to soar during the final stage of the bull market – the Melt Up. Last December, investors were scared silly. That’s why, in January 2019, I made my biggest commitment to stocks... ever. I invested more in stocks than I ever have before. The last time I made a major commitment to stocks like this was back in late 2008... Back then, I put all of my investable assets to work in stocks – and then some. I even took out a line of credit on my home and I
We look at it in a variety of different ways, but the most common way to size up fear in the markets is through the Chicago Board Options Exchange Volatility Index (the “VIX”) – often referred to as the market’s “fear gauge.” When stock prices move wildly, the VIX goes up. When stock prices aren’t volatile, the VIX moves down. The VIX spiked during each of the recent falls. Generally, a VIX reading of more than 20 shows fear in the market. In late 2015, the VIX rose above 40 – a level not seen since 2011. The VIX nearly hit 30 again in February 2016. In February 2018, after months of record- setting lows, the VIX spiked all the way to 37. And December 2018’s correction produced similar results. The VIX peaked at 36 on Christmas Eve.
invested it in the stock market. Why was I so confident in 2008?
This is exactly what we’re looking for. It’s exactly what happened before stocks melted up in the late 1990s.
The Volatility Index The last correction sent volatility soaring higher
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American Consequences
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