4 Ways to Manage Investor Risk Amid Low Volatility

If you’ve been thinking that stock markets have been pretty quiet in 2017, you are right--it's been more like the merry-go-round and less like a rollercoaster. Through the first seven months of the year, none of three major stock market indexes has fallen by more than 5 percent. And one gauge of market movement, the CBOE Volatility Index (VIX), which measures investors’ expectation of the ups and downs of the S&P 500 Index over the next month, recently dropped to its lowest level in 24 years. Low VIX readings have tended to be equated with muted anxiety and high stock prices. Amid this environment, you might be wondering what could go wrong? There are always risks that persist and while their existence does not mean that long-term investors should change their game plans, they are a reminder to guard against complacency and to always approach investing with caution.

BlogMark TalercioJuly 31, 2017CBOE Volatility Index, investor, Market Volatility, Markets, Risk, VIX, volatility

3 Economic Risks

During her Congressional testimony, Fed Chair Janet Yellen painted a fairly bright picture of the US economy, stressing a rebound in consumer spending, which should allow the central bank to gradually raise short-term interest rates over the next few years. Investors were heartened to hear that message and drove stocks higher, with the Dow closing at a new all-time high after Yellen’s first day of testimony. What could undo this rosy picture? There are a number of risks to the US and global markets that persist, though three rise to the top of the list. Their existence does not mean that long-term investors should change their game plans, but they are a reminder to guard against complacency and to always approach investing with caution.

BlogMark TalercioJuly 15, 2017bonds, Economic risks, Economy, Fed, Federal Reserve, Janet Yellen, Risk

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