Fear Is In The Air

CBOE MKT VOLATILITY IDX is a fund which allows investors to make money off of fear. Although it measures market volatility, it reacts positively when people are afraid and is nicknamed “the fear index”. How afraid is the world? The graphic below shows a 25.47% increase in the past five trading sessions. Compare that with 0.01% annual return on a money market.

While our stock market is down 3.26% in the same period of time, the main reason that it is not down significantly is the large influx of investors fleeing European markets.

David DeGerolamo

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