Our technician showed me this chart of the VIX since 1990. Note that when volatility slumbered in the 10-20 range from 1990 to 1997, we then experienced 7 years of eye-popping volatility from 1997 to 2004. After that we had another 4 years of slumbering in the 10-20 range again before all hell broke loose in 2008. 2010 marks the third year of huge swings in the VIX from 17-60 on this chart. If this were to continue to 2015 it would match the 7 wild years in the previous period. It would also line up with other indicators and historical cycles we follow suggesting this secular bear period could be with us until at least 2015. In the meantime, constant equity allocations will continue to be at the holders severe risk.
Cory’s Chart Corner
“An explosive critique about the investment industry: provocative and well worth reading.”
“Juggling Dynamite, #1 pick for best new books about money and markets.”
“Park manages to not only explain finances well for the average person, she also manages to entertain and educate, while cutting through the clutter of information she knows every investor faces.”