Investors Split on the Effect of Low Market Volatility


This week’s Sentiment Survey special question asked AAII members how the market’s lack of volatility this year has affected their sentiment toward stocks. Respondents were split. Approximately 44% described themselves as being cautious or feeling nervous about a forthcoming drop in stock prices. Many of these respondents do not expect the current low level of volatility to last. The second largest group, representing 42% of respondents, says the lack of volatility isn’t impacting their outlook. Some of these respondents describe themselves as not being swayed by volatility or being long-term investors. Just under 12% are encouraged by the lack of volatility.

Here is a sampling of the responses:

  • “It has made me more concerned about a forthcoming correction, which is way overdue.”
  • “None. I’m a long-term investor.”
  • “My stock allocation has not changed.”
  • “It makes me more willing to buy individual stocks.”
  • “Nervous. It appears the market is betting on legislative outcomes that are becoming likely to occur.”

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