The Pleasure of Lower Volatility

While discussing many interesting financial and economic issues this morning such as the VIX, various equities, Europe, many different sovereign bond yields, etc., it occurred to me that concerns of a VIX spike, while warranted, show the pleasure that comes along with low volatility.

One interesting investment comparison that helps portray this issue is a comparison of gold vs. silver.  Although, both have done well since ’00 (as seen in the longer-term chart 1), it is quite evident that the volatility lies more so with silver (as seen in the shorter-term chart 2).  I enjoy making money, but I also enjoy the pleasure of lower volatility.

Charts from kitco.com, click to enlarge.

Chart 1:

GOLD vs SILVER MAX

Chart 2:

GOLD vs SILVER 5Y

Related Reading: Silver bulls, are you ready to be tarnished?

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