Topley’s Top 10 – July 18, 2017

1. What Happens When the VIX Hits Record Lows.

 

This happy result is not an accident. Over the last three decades, the way to have made money from the VIX was to interpret it opposite to how a contrarian would—to be a contrarian’s contrarian, if you will. That at least is the conclusion of an academic study that is forthcoming in the prestigious Journal of Finance and written by two Yale finance professors, Alan Moreira and Tyler Muir. If the future is like the past, they convincingly show, you can safely invest in equities so long as the VIX remains low. You would reduce your equity exposure only when volatility spikes.

Mark Hulbert.

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http://www.marketwatch.com/story/the-shockingly-subdued-vix-doesnt-mean-what-you-think-it-means-2017-07-18

 

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