Investors stay calm amid market declines

Steve Sosnick, Interactive Brokers’ chief strategist, discusses his current thoughts on the CBOE VIX index and overall stock market volatility.

He warns traders against shorting the volatility index in most cases given the risk-reward trade-offs.

When volatility spikes, it’s usually a sign that investors are panicking. Yet right now, while we are seeing some retrenchment in the market, we are only about 4% from record highs, Sosnick points out.

So there’s not a lot of fear in the market.  To learn more, check out this video.

Photo Credit: Benjamin Balazs via Flickr Creative Commons

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Interactive Advisors
Interactive Advisors
Interactive Advisors is a pioneer in online investing. Interactive Advisors offers a variety of portfolios, including the Asset Allocation portfolios, which are managed by Interactive Advisors's Chief Investment Officer and Investment Management team. Diversification is about buying a basket of securities that tend to do well (or poorly) at different times and under different economic conditions. Being thoughtful about how much capital to allocate to each of these securities can result in far more consistent returns than concentrating all capital (and risk) in a single security or asset class. Interactive Advisors offers several diversified portfolios that are dialed up or down for risk, offer good diversification across different asset classes, and attain this diversification by investing in low-cost, liquid ETFs.