Mar 2020
We like to say that if you want to buy low and sell high, the first thing you have to do is buy low—which essentially means buying in times of heightened fears. Run-of-the-mill fears typically won’t get the VIX above 30, much less 40. To get such high readings, investor fears must seem believable. Put differently, if an investor waits until it is obvious that the fear du jour is overblown, then it will be too late to buy near the bottom—the VIX will have already fallen, and stock prices won’t be nearly as attractive as when fears seemed more believable.