Wall Street Is Entering A Period Of Volatility
For awhile, there was some smooth sailing and some serious highs for investors to enjoy on Wall Street. For those brave enough to get in early, the going was good and the returns, even better. Lately, however, volatility has kicked it up a notch, and June has taken investors for a wild ride with the Dow swinging more than 100 points during 7 out of the 8 trading days in June. The two primary gauges for volatility the “Fear and Greed Index” and the Chicago board Options Exchange’s Volatility index have moved towards obvious volatility. The Fear and Greed shifted from a comfortable ride with “Greed” to a sudden switch towards “fear”. The Volatility index jumped up 42% in the past six weeks, which is significant for that particular index.
Is Volatility On Wall Street Here To Stay?
Jamie Tyrell VIX trader at Group One Trading feels that unfortunately, volatility may be here to stay for awhile. He’s expecting a prolonged period of time where the DOW and the S&P 500 experience some pretty big swings. The primary reasons for the volatility are the Central bankers. Central Bankers at the FED, the ECB and the Bank of Japan have been in the bond buying business, which has boosted the stock markets over the last year. However, recent sentiment expressed by central bankers, indicates that central banks may not be dependable to keep bolstering stock market growth.
Central Bankers Play A Huge Roll In Market Volatility
If you’ve paid attention to the Fed Minutes, you’ll see the stock market yo-yo with each announcement from the Fed. Additionally, the U.S. treasury note has recently gone from 1.6% to 2.2% interest rates, indicating that easing is no longer suppressing interest rates. For more information on how to play the markets given the current volatility, it’s very important that you stay a step ahead of the economy and remain prepared for whatever lies ahead. In any economy, regardless of the state of the “fear and greed” index, there is money to be made, and profit to be generated. It’s simply a matter of getting in the right investments at the right time. For more information on which investments are expected to perform given today’s economy, speak to a Redhawk Wealth Advisor near you today.