Sensible Investing

VIX, a measure of future expectation of market volatility, dropped below 30 a few days ago for the first time in 8 months and since the collapse of Lehman Brothers.  VIX, also known as “fear gauge” was over 80 late last year.  If often moves inversely to benchmark market indices.

While some may argue that lower VIX demonstrates investors’ complacency, it is encouraging to see yet another indicator to return to normal levels.  VIX traded in the range of 20 to 30 during 1998-2002 and then 10 to 20 in 2003-2007 prior to the start of the financial crisis.