Buying the Last Cheap Asset Class Is a Dangerous Game
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In a market where everything from U.S. equities to real estate investment trusts to junk bonds looks pricey, there may be one last remaining cheap asset class: volatility.
Market volatility is at its lowest levels since (gulp) 2007. Add in the fact that the S&P 500 itself is 30 percent above where it was in 2007 and it’s no wonder many market-watchers expect more volatility. "It will take a lot of good luck to keep volatility as low as it currently is," wrote BlackRock Chief Investment Strategist Russ Koesterich in a recent blog post.