Money Monday: Understanding The Volatility Index

Given the recent volatility in the markets, you may be wondering how to respond.

You might have come across experts discussing the volatility index. Our Money Expert, Paul Hood, is here to explain what this index is and what we should take away from it.

Q: What is the Volatility Index (VIX)?

A: "It's called the CBOE, called the VIX. It's also called the Fear Index... It's a very short-term index. It's used to predict volatility in the next 30 days."

Q: What are the current market trends?

A: "We're down 5% for the month, but for the last six months, we're up 3%. Every year there's typically a double-digit drop."

Q: What's the key financial advice?

A: "You don't make financial decisions based on fear or greed. This is literally called The Fear Index, so it's a time to potentially take advantage of things."

Q: What should investors do during market volatility?

A: "Just relax. It's okay. Unless you're going to cash it all in and buy a house next week, which you shouldn't. Yes, you need to relax."

The quotes emphasize staying calm and maintaining a consistent investment approach during market fluctuations.