Economic Indicators
With the CBOE Volatility Index (VIX) reaching all-time lows last year, it was easy for investors to get complacent. But volatility has moved in multi-year cycles throughout the history of the VIX, so the relative tranquility of 2017 was not likely to persist forever. Volatility has picked up in recent weeks as markets have focused on the uncertainty surrounding monetary policy, inflation, and the trajectory of interest rates. While some pickup in volatility from last year’s extremely low levels is to be expected, it is too early to say if we are in a new volatility regime. Investors should be aware that periods of high volatility have historically been accompanied by below-average returns in the S&P 500 Index. However, these cycles can also create new opportunities. Fundamental research can help identify value in mispriced stocks and potentially achieve greater-than-index returns.
Past results are not predictive of results in future periods.
Economic Indicators
Asset Allocation
Interest Rates
RELATED INSIGHTS
Market Volatility
Dividends
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Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.