It was the
opposite of what stock analysts estimated about US President-Elect Donald
Trump's win; America expected a volatile and fluctuating stock market pummelled
by uncertain investors pulling out and likely investing their money in gold or
other secure-value assets. But the stock market continues to soldier on even if
the US Federal Reserve announced it would be raising interest rates.
The VIX
index remains steady. It is responsible for estimating the deep fluctuations in
S&P's 500 Index through a series of complex calculations. The VIX has
remained calm. The last fluctuation was in late August 2015 after the market
feared for an immense Chinese economic crash, having it raise up to 50.
When the
VIX increases, premiums also increase as turmoil and market fears hold sway
against investors. In 2017, the VIX raised itself to 32 from 20 due to unstable
oil prices and slowing global economic growth. When Trump had taken the lead,
the market's fears had grown further, bringing the VIX to a higher level. But
now, it is at 11.
According to
Luby Asset Management Chief Bill Luby in California, the number 11 is a
historic low even for VIX. About 15-20 is the stable figure for VIX, signifying
that investors may be becoming quite complacent and the current stock market is
indeed favourable for long-term investors.
