Tags: Ostrich | volatility | stock | market

BlackRock's Koesterich: More Volatility Coming to Stock Market

By    |   Tuesday, 22 July 2014 01:11 PM

The stock market has been full of calm in recent months, with the CBOE Volatility Index (VIX) hitting a seven-year low earlier in July.

But the military conflicts in Ukraine and the Mideast broke that quiet last week, and you can expect volatility to keep increasing, says Russ Koesterich, chief investment strategist for BlackRock.

"Investors should buckle up for more volatility ahead," he writes in a commentary on BlackRock's website.

Editor’s Note: Get These 4 Stocks Before 399% Stock Market Rally!

"Why? Despite recent market swings, volatility is still very low by historic standards. Even at its peak (last Thursday), the VIX only reached 15, roughly 25 percent below the long-term average." The VIX stood at 11.53 early Thursday.

"Low volatility suggests markets are complacent and not taking into account the prospect of bad news," Koesterich writes. "Indeed, there is no shortage of potential triggers for more turbulence ahead."

That includes geopolitical risk and the risk of a quicker-than-expected interest-rate hike by the Federal Reserve, he says. Many economists predict that Fed will wait until at least the second quarter of 2015 to raise rates.

Investors may already be heeding Koesterich's advice. They pulled money out of U.S. stock mutual funds for the second straight month in June, according to Morningstar.

"I think that [the stock fund outflow] has to do with the fact that the stock market appears to be fully valued," Michael Rawson, an ETF analyst at the firm, said on Morningstar.com.

"If we look at our [Morningstar's] price/fair value estimate, driven by our equity analysts, the stock market is at 103 percent of fair value."

Editor’s Note: Get These 4 Stocks Before 399% Stock Market Rally!

© 2020 Newsmax Finance. All rights reserved.


   
1Like our page
2Share
StreetTalk
The stock market has been full of calm in recent months, with the CBOE Volatility Index (VIX) hitting a seven-year low earlier in July.
Ostrich, volatility, stock, market
279
2014-11-22
Tuesday, 22 July 2014 01:11 PM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved