Time, Diversification and the Volatility of Returns This chart shows how the volatility of returns decreases over time (range of equity, bond and blended total return). Picture Source: J.P. Morgan Asset Management
The Yield Curve Leads Volatility by Three Years Is more volatility expected ahead? Yes, most likely. The CBOE Volatility Index or VIX usually follows the U.S. 10-year vs. 3-month Treasury spread (inverted) with a 3-year lag. See also “VIX is in a Transitory State.” Picture source: ClearBridge Investments
S&P 500 1-Year Volatility vs. EPS Revisions This chart from SG shows a good correlation between earning revisions and the S&P 500 1-year volatility. See also “S&P 500 1-Month Volatility History Since 1928 and VIX Since 1990.” Picture source: Societe Generale
S&P 500 Low Volatility Stocks Are the Best Performing Asset YTD This chart shows that S&P 500 low volatility stocks are the best performing asset year-to-date (outside of GSCI energy). Actually, high-quality stocks are a good way to protect against a weak economy. Picture source: Goldman Sachs Global Investment Research
US GDP Growth – Realized Volatility This chart shows that realized volatility of US GDP growth is very low today. It’s also good for the volatility of financial markets. Picture source: Jeroen Blokland
