![\"\"](\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2012\/03\/Bull-versus-Bear.jpg\" "\\"Bull")
![\"\"](\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2012\/03\/Panic.jpg\" "\\"stock")
![\"\"](\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2012\/03\/Market-Volatility-Visualized.jpg\" "\\"Market")
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Dear\u00a0PGM-Capital<\/strong>\u00a0Blog readers, The volatility index (“VIX”) is an index that measures\u00a0expectations\u00a0of\u00a0volatility, or fluctuations in price, of the\u00a0S&P 500 index. Higher values for the volatility index indicate that investors expect the value of the S&P 500 to fluctuate\u00a0wildly \u00a0‘up<\/strong><\/span>‘, ‘down<\/strong><\/span>‘, or both<\/strong>, in the next 30 days.<\/p>\n Thus, this\u00a0Volatility Index (VIX)<\/a>, <\/strong>is a\u00a0contrarian\u00a0sentiment indicator that helps to determine when there is too much optimism or fear in the\u00a0market. When sentiment reaches one extreme or the other, the market typically reverses course.<\/p>\n When the VIX is low, it means that fear in the market is low and when the VIX is high it means that fear in the market is high. Normally the markets behave rationally in a low VIX environment and irrationally in a High VIX environment. Due to this fundamental investors can use the VIX index to hedge against market volatility caused by fear and irrational trader and investor behavior.<\/p>\n For the past two years. our research team has been putting a lot of effort in trying to find a correlation or inverse correlation between the VIX index and the value of our portfolio, which is based on fundamentals in accordance with\u00a0Value-Investing<\/a>.<\/p>\n As you can see from below 5-year chart of the S&P-500 and the VIX-Index, the value of the S&P-500 has a reciprocal correlation with the value of the VIX.\u00a0Which means that by trading a Long or Double Long VIX ETF \u00a0in order to hedge against market volatility, subsequent irrational behavior of the markets in time of fear and uncertainties, investors can protect the total value of their portfolio and make it less volatile.<\/p>\n With the S&P-500 at a 4-year high and the VIX index at a 4-year low, and closing today March 23 2012 at\u00a014.82\u00a0\u00a0-0.75<\/strong><\/span> (4.82%)<\/span><\/strong>, we think that the time is right for buying the VIX and\/or Double VIX ETF in order to protect the portfolio against increasing volatility that might eat into portfolio value.<\/span><\/span><\/p>\n Keep in mind that buying the VIX ETF is one way of hedging against volatility and market incertainties, Gold is also a good hedge against incertainties and dilution of portfolio purchasing power.<\/p>\n Before following any investing advice, always take your investment horizon and risk tolerance into consideration.<\/p>\n Please feel free to call us for us to talk about your future.<\/p>\n Yours sincerely<\/p>\n Eric Panneflek <\/p>\n","protected":false},"excerpt":{"rendered":" Dear\u00a0PGM-Capital\u00a0Blog readers, This weekend we would like to discuss with you the \u201cMarket Volatility Index\u201d, better known as the VIX-Index or Fear-Index. The volatility index (“VIX”) is an index that measures\u00a0expectations\u00a0of\u00a0volatility, or fluctuations in price, of the\u00a0S&P 500 index. Higher values for the volatility index indicate that investors expect the value of the S&P 500[…]<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,19,20,13,15,1,18],"tags":[],"class_list":["post-5789","post","type-post","status-publish","format-standard","hentry","category-eric-panneflek","category-financial-news","category-general-information","category-market-volatility","category-pgm-capital","category-uncategorized","category-world-economic-outlook"],"_links":{"self":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/5789","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/comments?post=5789"}],"version-history":[{"count":0,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/5789\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media?parent=5789"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/categories?post=5789"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/tags?post=5789"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nThis weekend we would like to discuss with you the \u201cMarket Volatility Index\u201d, better known as the VIX-Index or Fear-Index.<\/p>\n![\"\"](\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2012\/03\/March-23-2012-SP-500-5-year-chart.png\" "\\"March")
<\/p>\n![\"\"](\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2012\/03\/March-23-2012-5-years-VIX-index-Chart.png\" "\\"March")
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\nChairman<\/p>\n