Market history · Volatility ·
The year volatility vanished
In 2017 the VIX volatility index traded at its lowest levels since it began in 1990, closing below 10 on several days. The S&P 500 delivered a positive total return in every month of the year, and its largest peak-to-trough fall was only around 3%.
Coordinated global growth, low inflation and steady central-bank support suppressed volatility, and encouraged strategies that assumed calm would persist. Those assumptions were tested in February 2018.
The takeaway
Low volatility is not low risk; it can be a sign of complacency.
This is a retrospective about a past event, provided for general information. It is not investment advice, does not describe RockLake's positioning at the time, and past performance is not a guide to future performance. Read the risk warning.