There is a view that a big correction in the US stock market lies around the corner, because volatility is very low. This view has been influenced by the fact that volatility was very low before the financial crisis. Yet volatility was even lower in the early 1990s, before a multi-year bull market. Big corrections are not caused by low volatility, but by unanticipated, unwelcome developments.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.