Wall Street’s Fear Index Plummets to an almost Quarter Century Low – which is actually Good News

By Jack J. Kelly

On a daily, actually minute-by-minute, basis the mass media inundates us with fear and terror.

Breaking news alerts on cable television news programs warn their already nervous audience of a possible nuclear war with North Korea and the potential of World War III between the US and Russia. The news constantly showcases political pundits verbally assaulting each other claiming the other side is going to cause the ruin of our nation and the world. Shocking videos of terrorist attack violence are run on seemingly constant loops on television and appear everywhere on social media sites. We are beset by articles suggesting robots will take over our jobs, health care will be lost, and college kids are rioting at our most prestigious campuses.

It takes nerves of steel not to be rattled by the onslaught of negative news portending doom and gloom.

Interestingly, a bellwether  gauge, followed by Wall Street but little known by main street, called the  Volatility Index, also referred to by finance guys as the  “Vix” or “Fear Index” due to its measure of worry and anxiety in the market, has fell to its lowest level since 1993.

The drop in value of the Vix (yes, you can buy and sell the index) reflects that market participants including hedge funds, banks, traders, and brokers believe that all is well in the world. If the Vix rises, it indicates the increase in fear and that money managers are concerned the stock market is in for a fall in value.

In addition to the Vix declining, the stock market has been hitting record highs. It almost seems as if there is a parallel universe between what we watch on TV,  read on social media and the reactions of so-called sophisticated investors.

I hope that the Vix is right and everything is okay. Sadly,  often times the “smart money” big players on Wall Street get things completely wrong (remember a little thing called the financial crisis of 2008?).

Today, I’ll go with the future will be fine attitude.  Just in case, I am going to buy the Vix index which will spike in value if thing go south.

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