Per this article, VIX is in charge of tracking institutional sentiment which determines which direction the market might go. When VIX is high, there is high anxiety in the market and the market turns bearish. When VIX is low, there is low anxiety in the market and the market turns bullish.
It has a negative correlation with SPY. In other words, when SPY goes up, VIX goes down and vice versa. Only once was there an instance when both VIX (anxiety) and SPY (S&P 500 performance) were high but that seems to be an outlier.
Over the last 12 years it seems the 08' recession and the 2021 pandemic were the only points of significant anxiety in the market with low anxiety in between as the VIX indicator returns to the mean, even during 2021.
No one can predict the future and I'm only guessing here but it seems like a time span of 10 years seems to be the average for the market to take a huge hit, only for VIX to go down and SPY going up shortly after such an event occurs.
Assuming this estimate is correct, what would be your investment vehicle per your financial situation?
Submitted November 14, 2021 at 01:06PM by throwawayjob007 https://ift.tt/3cdwhiw
