“Overlook low volatility, low volume at extreme risk to your financial health”

The CBOE volatility index dropped today to its lowest level since mid-2007; down 30% since last Tuesday. So risks today are deemed as low as they were in mid-2007 just before the start of the last recession and 45% stock market drop? That is comforting!! Hans Olsen, Barclays Wealth, weighs in. And Hans works for a long-side firm, so for him to say hold back some cash for better prices ahead and hedge your current stock exposure is about as bearish as he can get.  Here is the direct link.

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4 Responses to “Overlook low volatility, low volume at extreme risk to your financial health”

  1. dave says:

    as stated in the article gains are gains regardless of whether volume is there or not. As warren buffet once said if you wait for the robins you may miss most of spring

  2. Roberta says:

    Thanks for that bespokeinvest link in comment above. It’s true, the market is up for 3 years now. Question is, how much longer will it go up? If I knew that I might be rich. I’m wondering if the government cash pumping the US stock market (foreign and domestic governments) will prevent the drop that most feel is needed. I prefer another drop so the system can be reset and we can buy some bargains. However, I don’t want a drop that wipes everyone out so that all cash disappears, then we would not be able to buy at bargain prices.

    We’re in a fine mess. How can you trust a market propped up by bankrupt governments? They will not be able to prop it up forever. BUT it is true that if you can sell before it falls too far when TSHTF you could do OK, assuming the currency is still worth something, which is questionable at best.

  3. dave says:

    improving health at banks generally leads to easier access to credit. That, in turn, leads to economic improvement, growth and hiring. The relative performance of banks in 2012 tells me that this rally is probably closer to its beginning than to its end. In fact, I believe equities are heading MUCH higher in 2012

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