Opinion
Why you should vote at the ballot box and not with your portfolio
Election uncertainty in the US and Europe looks to increase volatility but investors should be cautious about over or underestimating the impact of political change.
Andrew McAuleyManaging Director at UBS AustraliaVolatility is driven by uncertainty. With wars in Ukraine and the Middle East, upcoming elections in the US and Europe, and changes in government regulation, one could be forgiven for assuming volatility is high.
But, in fact, the opposite is true. The most widely used measure of volatility in the equity market is the VIX Index. Sometimes called the “fear gauge”, it attempts to measure the expected volatility in the S&P 500 by aggregating option prices over the S&P 500 and considering the change in those prices. The VIX currently sits at 12.8, lower than its average over the past 10 years of 19.5.
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