Fear gauge dips, but volatility likely to return

With the ongoing European debt crisis, a slowdown in China’s economic growth, and concerns about a so-called “fiscal cliff” at the end of 2012 for the United States, market volatility jumped in the second quarter compared with the first.

The Chicago Board Options Exchange Volatility Index (VIX), also known as the “fear gauge,” only recently snapped a five-week trend by falling below its long-term average of 21.10.

For the first time since May 11, the VIX closed below 20.00 at 18.32 on June 18, 2012.

It appears macro risks are influencing investor sentiment. Find out how advisors are planning to confront the problem of volatility on behalf of their clients in our online survey. Submit your opinion and get real-time results.