This was written by a trend follower in December 2004:
“‘Buy low, sell high” – it’s the mantra of every traditional, stock-and-bond investor. But in today’s market, finding a low-priced, ‘undervalued’ asset can be challenging. Interest rates are at long-term lows, meaning that bond prices are very high. The valuation levels of equity markets appear high as well, as measured by price/earnings or other traditional indicators. Where is there a bargain in these financial markets? Perhaps the answer lies in the historically low volatility of markets. Despite war, global energy turmoil, massive deficits, a hotly contested U.S. presidential election, and other complicating factors, volatility – as measured by the Volatility Index (VIX) – has dropped to unexpectedly low levels…”
Interesting, eh? Times change, times don’t change.