VIX: ‘Love Gauge’ More Than ‘Fear Gauge’
Reel Ken, 13 June 2021
Most investors are unfamiliar with the workings of the S&P VIX Index (VIX), traditionally called the “fear gauge.” Not just the “inner workings” such as how it is calculated, but, the outward characteristics it displays. They perceive the VIX simply as a metric that might help them prepare for market movements. But those that try to make sense of it as a metric aren’t even so sure about that.
These investors dismiss the VIX as an investment mostly because they haven’t taken the time to look it over more closely. Continue reading “Article: VIX: ‘Love Gauge’ More Than ‘Fear Gauge’”
SH: A Dangerous Way To Position For A Crash
Stuart Allsopp, 21 May 2021
I fully expect U.S. stocks to decline sharply over the coming months and potentially years as the extreme level of valuation and bullish sentiment cannot be maintained indefinitely. I have written about the risks of major losses in the S&P 500 and other indices a number of times over recent months and I remain fully convinced that we are on the precipice of a market crash and/or a long-term bear market. See ‘VTI: Rising Inflation May Burst This 3-Sigma Bubble’ for my most recent article on U.S. stocks, or ‘SPX: Don’t Be Suckered In By ‘Low’ Forward P/E Ratios’ for my take on the S&P 500 in particular. That said, I do not think being long the ProShares Short S&P 500 ETF (NYSEARCA:SH) is a good way to take advantage of the upcoming equity weakness.
SH Is A High-Risk Option For Gaining Downside Market Exposure
Risk management is equally, if not more, important than getting the major market moves right, and the SH is a high-risk option. Even for those investors with little alternative to get exposure to S&P 500 downside, I would not recommend this ETF other than for savvy market timers who intend to hold their position for a matter of days rather than weeks or months. Continue reading “Article: SH: A Dangerous Way To Position For A Crash”