Wednesday, September 23, 2009

Fear subsides, prices rise (12)

A quick update to this chart which I have shown at least a dozen times in the past year. The VIX index hasn't been as low as it is today for over a year, which was right before the Lehman disaster. Slowly but sure the market is recovering its balance, and investors are regaining their confidence. It's not surprising then that the equity market keeps making new highs for the year. This is a virtuous cycle and is likely to continue, even though ever-higher prices on equities seem to increase some investor's fear that a correction is right around the corner.

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