Below is a chart and brief excerpt from today's Early Look written by Director of Research Daryl Jones.
The interesting thing about volatility is that it does have some predictable patterns. Consider the last 10 years of the VIX as an example:
As always, we play the game in front of us. Perhaps this will be the 1 out of 9 times that the SP500 loses money? Perhaps not. As a gauge of volatility, the VIX measures investor psychology. Therefore, a rapidly increasing VIX typically represents the puking (to use a scientific term) of stocks.
But as Warren Buffett famously said:
“Be greedy when others are fearful.”