What to Buy When Volatility Spikes

by Jim Nelson
By Jim Nelson

The past three weeks haven’t been kind to investors. So far, the market’s decline in April has already wiped out all gains made in March and part of February, too.

Of course, we can get into all the reasons for this — including hot inflation, cooling anticipation of rate cuts and the increased tension in the Middle East.

But rather than the causes, let’s look at one effect of the recent correction in stock prices — volatility.

Here’s the year-to-date chart of the CBOE Volatility Index, or VIX:

Click here to see full-sized image.

 

That’s what happens when the major indexes break their trends … volatility spikes.

Now, the VIX at 18 isn’t wild. It nearly hit 22 just six months ago, and 25 early last year. Historically, anything over 30 is when things get really bad.

It peaked above that threshold several times in 2022. And you probably remember how painful that year was for performance.

Still, volatility does often go hand in hand with opportunity. You just need to know where to look.

Thankfully, our team of experts are always on the hunt for opportunities … and they DO know where to look. Here’s what they are finding …

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Have a great weekend,

Jim Nelson
Managing Editor, Weiss Ratings Daily

About the Contributor

Income expert with more than a decade’s worth of experience with recommending the sale of options and purchase of dividend stocks in financial publications. He is the associate editor of our Weekend Windfalls service and manages several of our other publications.

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