Given all the armed uprisings, coups and mass protests around the world these days, you’d think investors would be panicking. But most appear untroubled, content with their holdings and loath to make any big moves. Some experts warn that, as with the weather, calm often precedes a storm.
Among the signs of tranquility:
— LITTLE TRADING: So far this year, investors have traded an average 3.4 billion shares each day on the New York Stock Exchange, 38 per cent less than they did in the same period four years ago.
— SMALL PRICE MOVES: The Standard and Poor’s 500 index has risen or fallen less than 1 per cent for 46 days in a row, a rare state of stasis. Stocks haven’t moved so little for so long since 1995, says Howard Silverblatt, senior index analyst for S&P Indices.
— CALM AHEAD, MAYBE: Meanwhile, the so-called Vix index, which tracks expected price swings in the S&P 500, suggests things could remain sleepy for a while yet. That measure, dubbed the “fear index” by traders, has been hovering around 11 recently, about half its 10-year average. Last week, it dropped to 10.6, the lowest since 2007, when stocks began a 2 1/2-year drop that erased half of their value.
— NO CORRECTION: Professional stock investors say it’s healthy for a bull market to occasionally have a “correction,” or a drop of 10 per cent or so. The S&P 500 hasn’t had one for nearly three years, twice as long as the average back to World War II.