#premium bonds prize fund

[news-buzz]

NS&I Premium Bonds holder scoops £25,000 prize from just £1 | Personal Finance | Finance News Buzz

An NS&I Premium Bonds holder won a staggering £25,000 prize from an investment of just £1. The bond holder from Staffordshire scooped the winnings in September 2024 from the £1 investment made in April 1960. Premium Bonds are a savings account offered by National Savings & Investments (NS&I), one of the largest savings institutions in the UK backed by the Treasury. The accounts don’t earn…

[influencermagazineuk]

Two Lucky Millionaires Win Big with Premium Bonds!

Two lucky winners each gained £1 million in July 2024 from Premium Bonds. Both winners had the maximum quantity of £50,000 in bonds. This month, over 5.9 million prizes had been presented, totaling almost £456.Five million. Many different winners gained considerable quantities with smaller bond holdings. In July 2024, two human beings became millionaires via Premium Bonds. They both had the most allowed amount of £50,000 invested in those bonds. One winner is from Hertfordshire, who bought their bonds in November 2016, and the alternative is from Cumbria, who offered theirs in October 2021. National Savings and Investments (NS and I), the organization behind Premium Bonds, announced that this month they provided over five.9 million prizes, totalling almost £456.Five million. This includes now not simply the two £1 million winners however also many other huge prizes. Besides the 2 £1 million winners, 87 human beings won £a hundred,000 every, and 157 people received £50,000 each. Some of the thrilling wins consist of someone from South Yorkshire who won £one hundred,000 with just £500 worth of bonds. Another character from Cumbria won £50,000 with only £a hundred and one well worth of bonds, which they sold in January 1979. Currently, Premium Bonds have a prize fund rate of four.4%. This method that for each £1 bond variety, the chances of triumphing any prize are 21,000 to at least one. These bonds are also tax-unfastened, which could be very beneficial for plenty human beings. According to the brand-new records from HMRC, savers will collectively pay more than £10 billion in tax this economic year. More than 22 million people have Premium Bonds. Last month, each winner of the £1 million jackpot also had the most amount of £50,000 in bonds. We lately checked out the past 50 Premium Bond attracts, not such as the modern-day one from July. In these attracts, 100 humans have become millionaires. This period goes again to May 2020, whilst the Premium Bonds became very famous due to the pandemic. On average, a £1 million winner had £38,779 in bonds. This is lots higher compared to the average Premium Bond keeping, that is £five,250. Interestingly, 38 out of the 100 new millionaires had the most £50,000 in bonds. Premium Bonds are a popular manner to shop and possibly win massive prizes. They provide tax-loose winnings and feature turn out to be an important tool for lots savers. Even though the chances of winning are slim, the excitement and possibility of becoming a millionaire. To take a look at in case you are a winner within the July 2024 draw or to look all of the prizes from £1,000 to £1 million, you can visit the NS and I website. Keep a watch in your numbers and who is aware of, you might be the subsequent fortunate millionaire! Read the full article

[passiveincomemoney]

Understanding Premium Bonds: A Guide to the UK's Popular Investment Option

Premium Bonds, offered by the UK's National Savings and Investments (NS&I), present a unique investment opportunity that differs significantly from traditional savings accounts or investment bonds. Here's a comprehensive look at their main characteristics:

Lottery-Style Rewards: Instead of interest, bondholders are entered into a monthly prize draw with the chance to win tax-free prizes.

Investment Limits: There's a minimum investment of £25 and a maximum limit of £50,000, making Premium Bonds accessible yet capped to ensure fairness.

Tax-Free Prizes: All winnings from Premium Bonds are tax-free, which can be particularly appealing for higher-rate taxpayers.

Odds of Winning: The odds of winning a prize in the monthly draw are approximately 24,000 to 1 for every £1 Bond.

Prize Fund Rate: The annual prize fund rate is variable, currently at 3.70%, which influences the number and value of prizes.

Accessibility for Children: Premium Bonds can be purchased for children under 16, with the parent or guardian managing the bonds until the child comes of age.

Government Backing: NS&I, which offers Premium Bonds, is backed by the UK Treasury, ensuring 100% security on the capital invested.

Inflation Risk: While the capital is secure, Premium Bonds do not protect against inflation, which can erode the purchasing power of the invested amount over time.

No Regular Income: Premium Bonds do not provide a steady income stream, which might not suit those who rely on regular interest payments for income.

Gift Option: They can be bought as gifts, especially for children, which can be an attractive feature for family members looking to gift savings.

Ease of Purchase: Bonds can be bought online, by phone, or by post, offering convenience and flexibility for investors.

Return of Capital: Investors can always get their original investment back, as the bonds can be cashed in at any time without penalty.

Non-Market Linked: The value of Premium Bonds does not fluctuate with market conditions, providing stability in principal value.

Inheritance Tax: While the prizes are tax-free, the bonds themselves are not exempt from inheritance tax considerations.

Exemption from Personal Savings Allowance: Premium Bonds do not count towards the personal savings allowance, which is beneficial for those who have already maximized this with other savings.

Premium Bonds represent a blend of security and excitement, offering a government-backed investment with the thrill of potentially winning substantial tax-free prizes. They are particularly suitable for those searching for a safe place to park their money while enjoying the chance to win prizes. However, they may not be the best choice for investors seeking regular income or those concerned about the impact of inflation on their savings.

For more detailed information on Premium Bonds and how they can fit into your savings strategy, visit the NS&I website or consult financial resources like Investopedia.

[interestrateuk]

Have premium bond interest rates gone up?

New Post has been published on https://interestrate.co.uk/have-premium-bond-interest-rates-gone-up/

Have premium bond interest rates gone up?

While interest rate rises throughout 2022 and 2023 have proven problematic for borrowers, they have come as good news for many savers. Many people with savings had to cope with minimal interest while the Bank of England base rate remained at historic lows, but this has now changed due to the spate of rate hikes since December 2021. Many are now enjoying much higher rates of interest on their savings.

For borrowers with variable-rate loans, mortgages, credit cards, and other forms of finance, the rate increases have come as a shock. However, for savers, the rises have allowed them to see their bank account and building society account balances swell with increased interest.

Of course, savers must consider the savings account they choose if they want to make the most of their money. There are many different accounts that savers can choose from these days, from ISA tax-free savings accounts to easy access accounts, junior ISAs, and other savings products, and the rate of interest paid can vary.

It can be challenging for savers to choose the best building society, bank account, or investment account because of the many available options.

Launched in the 1950s to encourage saving, premium bonds have become popular with people of all ages who want to save money while being in with the chance to win big money. Accounts can be set up easily and quickly on the NS&I website (National Savings and Investments), and many lucky premium bond holders have won massive amounts of money in the monthly prize draw.

So, what about interest rates?

When people open a bank account, whether a cash ISA, direct ISA, income bonds, or any other savings product, they want to know the savings rate/AER. They also want to know about things such as whether it is an easy-access savings account or whether their money will be tied up for a specified period.

With the premium bonds model, no interest is paid on your money. So, if you put your money into premium bonds with NS&I, you won’t earn interest, but the entire sum held – which becomes the prize fund – does earn interest. This means that if interest rates increase, the prizes will be worth more.

However, there are changes with the premium bonds prize fund rate, which means that the prize fund will be higher with the number of prizes up for grabs increasing.

NS&I offers several savings products, including Green Savings Bonds and Growth Bonds. In addition to increasing the prize fund rate, NS&I has increased the rate on its Direct Saver and Income Bonds.

In June 2023, NS&I announced that the interest rate on the prize fund would increase from 3.30% to 3.70%. This was to be effective from the July prize draw. Just a month later, in July 2023, it was announced that the interest rate would rise again, from 3.70% to 4.00%.

Premium bond interest rates have increased to the highest level since 2007, generating excitement among investors. The most recent increase that the chances of winning a prize has improved to 1 in 22,000.

According to officials from NS&I, the interest rate increase means that an additional £30 million is added to the prize fund, and the number of prizes has increased by 460,000. This is likely to make the government-backed savings scheme even more popular, with the Chief Executive of NS&I, Dax Harkins, stating that they were delighted to be able to improve odds for premium bond holders.

What are the pros and cons of premium bonds?

If you are considering getting premium bonds, the interest rate increase on the prize fund and the number of prizes now up for grabs seem appealing. However, weighing up all the pros and cons before you decide whether this is the right savings route for you is crucial.

The pros

Tax-free winnings

One thing that attracts many people to premium bonds is that winnings are tax-free, so winning big could mean significant savings for taxpayers.

Chance to win big

The prizes you can win with premium bonds range from £25 to £1 million. There are only two £1 million monthly payouts, but winning the jackpot or another big prize is possible. Essentially, every bond you hold is like a lottery ticket, so you have the chance of winning something in every monthly draw that takes place.

Easy access to money

Another thing to remember is that you have easy access to your money with premium bonds. You can request to withdraw some or all of your bonds at any time, which will be paid into your bank account within a matter of days. In addition, you can request that any prize money you win is either reinvested automatically or paid into your bank account.

Simple to set up and monitor

Setting up and monitoring your premium bonds account is very simple, and you can do it all online these days. You no longer have to apply by post, although this is an option, and you no longer need paper certificates. Instead, everything is stored and dealt with online, and even your prize notifications can be sent via email.

The cons

No interest paid on savings

While there is interest on the prize fund, you won’t pay any interest on your savings when you have premium bonds. So, if you do not win any prizes, the amount in your premium bonds account will remain the same, no matter what happens with the base interest rate.

Maximum of £50,000

For some people, the fact that there is a limit on the amount that you can hold in premium bonds could be off-putting. Some people want to put all their savings into one place, but the maximum you can have in premium bonds is £50,000.

Odds of winning

While being in with the chance of winning a big prize can be exciting, the odds of winning are still low. The odds have improved from 24,000 to 1 to 22,000 to 1, which is good news. However, many people with premium bonds never win a prize, so you need to keep this in mind.

Cannot be inherited

Remember that you cannot inherit premium bonds, and it is not possible to assign a beneficiary. In the event of the account holder’s death, the estate executor can keep the premium bonds active for a year or cash them in as part of the estate. If they choose to keep them invested, they will have to be cashed in after one year.

Making the right decision

Now that we’ve looked at how interest rates work on premium bonds and delved into the pros and cons, you can make a more informed decision regarding whether premium bonds are the right choice.

Many people invest some of their savings in premium bonds in the hopes of winning and the remainder in a high-interest savings account. It’s like having a balanced diet for your money. By spreading your savings across these two avenues, you’re reducing the risk of having all your hopes pinned on a single outcome. It’s a strategy that gives you the best of both worlds – the thrill of chance and the steady growth of reliability.

[qudachuk]

The Premium Bonds prize fund rate will reach a 15-year high from the July prize draw, increasing to 3.70% from 3.30%.

[oneminutemoneymagazine]

UK Savings - Premium Bonds

This form of national savings has full security of capital.  However, instead of adding interest in the normal way, a notional rate of interest applies which creates a monthly prize fund.  Prizes are then awarded by random selection.  No tax is deducted.

The notional interest rate was reduced from 1.4% p.a. to 1.0% p.a. from 1st December 2020.  In my view, premium bonds remain very competitive in today’s savings market in the UK.  Switching existing savings into premium bonds is well worth considering.

Some bondholders currently receive their prizes by cheques (called warrants) being sent by post.  This option is in the process of being withdrawn, but computer problems are delaying the change.  Continuing options are paying the prizes directly into a bank or building society account and using them to purchase more bonds, subject to not exceeding the maximum £50,000 holding.

(23/12/2020)

[onlyexplorer]

NS&I Premium Bonds: Can you increase your chances of winning the £1million jackpot? | Personal finance | Finance

NS&I Premium Bonds: Can you increase your chances of winning the £1million jackpot? | Personal finance | Finance

She said: “First of all, we were delighted to announce the increase in the premium bond price fund rate from 1% to 1.40%, starting with this month’s draw, which will see 1.4 million additional prizes paid. “Premium bonds have really changed over the years, with the first draw having 23,142 prizes and this month’s draw a total of 4,823,067 prizes – a record number for a premium bond draw.” The…

[beanghon]

Highly Initial Factors About Yotta

Itrrrs said that 40% from Americans fight to derive it down $400 to pull up quickly? This type of will come associated with hardly surprising taking a look at precisely how saving your money does seem nearly impossible having the very least pay duties along with ascending overheads of life. The sad thing is, people in these sort of fret often times resort to the lottery game find out his or her selves acquiring thin air. There needs to be an additional way, most suitable? Can make isn’t like exceptional sports activity when declare participating Blackjack, one single combo claims an individual's depositing remedy will generate the very same expect, enjoyment, not to mention pleasure. At this stage , it should be becoming show them Yotta. Yotta is actually a savings and many benefits smartphone app produced to restore errors in just old-fashioned financial savings bill and also to advice Americans are more on a financial obtain. There exist two reasons why most people generally uncover solace located in Yotta. First, the entire web developers added a reply brings about conserving money without delay amusement, and also second, they supply better money appreciate than most final savings stories.

For people unsure about what’s which means entertainment dealing with protecting (on top of that an evergrowing financial institution account), the group asserts that can throughout Yotta, people will receive opportunity to get huge. Specially, which they take pride in partnering with the help of high-value bankers. By doing this, a portion of the interest is pooled together, which can be accessible like funds by simply daily handful attracts. The premise with regards to such a model appears to be theoretically passionate merely by Premium Bonds with the UK, precisely where 23 million people today taken part in discounts goods to actually be successful rewards. To put objects into prospective, suitable for every $25 placed right into the about Yotta, one ticket is truly procured. Utilizing this ticket, consumers can opt 7 balls, as well as every afternoon an innovative new wide range is without a doubt attracted. It is a remarkable a component since people purchase searching for added each day, that's why, pushing it deeper and more with regards to their objectives. Gets hotter it seems like a win-win dilemma hold off until a number of us critique its certainly popular characteristics! If required, serious customers can just click here or else check-out your actual website to know more relating to the Yotta app.

There are definite traits that you receive in the software application, by way of example, Prize-Linked Savings Accounts, FDIC Insured, Access to Debit & Credit Cards, Buckets, Crypto Yield Bucket, Paycheque Perks, Credit Builder, etc. To enroll in a Yotta account, every one that’s recommended is a really name and email address. To be able to take home concert tickets, a financial institution account should associated with the practical application, and additionally savings produced. For your choice, info on street address, birth date, as well as social security number are going to be wanted. Relax, information is strongly carried by means of SSL and absolutely are likely to be rescued in the Yotta servers. Yotta doesn’t change out a current banking company. Preferably, Yotta combined in Checked, creating clients to acquire his / her normal consumer banking institutions within your Yotta app. This is one way to assist you to send finances directly into the Yotta Cost savings Account. Folks with hopes to comprehend these Yotta reviews in addition to other highlights will feel able to trip this informative.

[sommaaaadmmw]

NS&I updates Premium Bonds prize checker for November 2021 - have you won?

remain a popular method of saving, as instead of an interest rate, there is a prize rate fund which supports the chance for savers to win. The Premium Bonds millionaires from this month both came from Bristol, and bought their winning numbers in recent years. But as these are not the only people to win, many will be keen to if their Bonds have secured them any prize.  เล่นบาคาร่าออนไลน์ฟรี

[0531223]

NS&I updates Premium Bonds prize checker for November 2021 - have you won?

remain a popular method of saving, as instead of an interest rate, there is a prize rate fund which supports the chance for savers to win. The Premium Bonds millionaires from this month both came from Bristol, and bought their winning numbers in recent years. But as these are not the only people to win, many will be keen to check if their Bonds have secured them any prize.  สูตรโกงบาคาร่า

[differentnutpeace]

NS&I updates Premium Bonds prize checker for November 2021 - have you won?

remain a popular method of saving, as instead of an interest rate, there is a prize rate fund which supports the chance for

 savers to win. The Premium Bonds millionaires from this month both came from Bristol, and bought their winning numbers in recent years. But as these are not the only people to win, many will be keen to check if their Bonds have secured them any prize.    สูตรโกงบาคาร่า

[wineanddinosaur]

Two Winners of NH $65K Whiskey Package Raffle Will Get Bottles of Pappy, Old Fitzgerald, and More

New Hampshire Liquor and Wine Outlets are raffling off a combined $65,000 worth of whiskey to two lucky winners.

The coveted package includes rare finds such as Pappy Van Winkle’s Family Reserve 23, Old Fitzgerald 15-year Bottled-in-Bond, and Old Forester Birthday Bourbon, among 13 other rare bottles.

A maximum of 3,500 tickets are being sold for a price of $100. We’re nearing the end of the raffle, which began on Sep. 15, but fans of premium bourbon can enter as many times as they want until Oct. 15 at 4 p.m.

Winning the whiskey collection is not the only incentive to enter. This year, the New Hampshire Liquor Commision (NHLC) partnered with Best Buddies New Hampshire to fund the nonprofit’s mission to help those with disabilities.

Winners are also rewarded with an all-expense trip to New Hampshire, which includes airfare or mileage, hotel accommodations in Manchester, N.H., and stipends for dining. The prize culminates with VIP tickets to the Distillers Showcase of Premium Spirits (with seminars, tastings, and celebrity panels), access to an NHLC-sponsored tasting event, and tickets to a Buffalo Trace tasting dinner during the first week of November.

Earlier this year, the Pennsylvania Liquor Control Board hosted a similar lottery, though the prize was not nearly as extensive.

Considering the hefty package and premium whiskeys being offered, a $100 ticket doesn’t sound too bad.

The article Two Winners of NH $65K Whiskey Package Raffle Will Get Bottles of Pappy, Old Fitzgerald, and More appeared first on VinePair.

source https://vinepair.com/booze-news/pappy-van-winkle-old-fitzgerald-raffle-nh-2021/

[usnewsrank]

Premium Bonds September 2021: Winning numbers and how to check if you’ve won

Premium Bonds September 2021: Winning numbers and how to check if you’ve won

Could you be a September Premium Bonds winner? (Picture: Peter Dazeley via Getty Images) The September Premium Bond prize draw will see two lucky winners receiving £1 million each. A woman from Bristol and a man from Shropshire have bagged themselves the big jackpot, with each having a £30,000 holding in the prize fund. You can win a prize with NS&I’s Premium Bonds draw by having as little as £1…

[oneminutemoneymagazine]

Premium Bond Prizes

Premium bonds are a secure form of savings offered by National Savings and Investments (NSandI) on behalf of the UK government.  Instead of actually paying interest, there is a notional rate of interest which generates a prize fund.  Tax free cash prizes are then paid to bondholders drawn at random.

From the 1st May, the notional rate of interest will be reduced from 1.40% to 1.30% per annum.  This remains very competitive, especially bearing in mind the tax free status of the prizes.  Other NSandI interest rates are also being reduced.  There’s more on https://www.thesun.co.uk/money/10980209/nsi-cuts-interest-rates-reduces-premium-bond-prizes/

(18/02/2020)

[mysharelive]

Volatility and risk in stock market

Volatility is considered the most accurate measure of risk and, by extension, of return, its flip side. The higher the volatility, the higher the risk – and the reward. That volatility increases in the transition from bull to bear markets seems to support this pet theory. But how to account for surging volatility in plummeting bourses? At the depths of the bear phase, volatility and risk increase while returns evaporate – even taking short-selling into account. “The Economist” has recently proposed yet another dimension of risk: “The Chicago Board Options Exchange’s VIX index, a measure of traders’ expectations of share price gyrations, in July reached levels not seen since the 1987 crash, and shot up again (two weeks ago)… Over the past five years, volatility spikes have become ever more frequent, from the Asian crisis in 1997 right up to the World Trade Centre attacks. Moreover, it is not just price gyrations that have increased, but the volatility of volatility itself. The markets, it seems, now have an added dimension of risk.” Call-writing has soared as punters, fund managers, and institutional investors try to eke an extra return out of the wild ride and to protect their dwindling equity portfolios. Naked strategies – selling options contracts or buying them in the absence of an investment portfolio of underlying assets – translate into the trading of volatility itself and, hence, of risk. Short-selling and spread-betting funds join single stock futures in profiting from the downside. Market – also known as beta or systematic – risk and volatility reflect underlying problems with the economy as a whole and with corporate governance: lack of transparency, bad loans, default rates, uncertainty, illiquidity, external shocks, and other negative externalities. The behavior of a specific security reveals additional, idiosyncratic, risks, known as alpha. Quantifying volatility has yielded an equal number of Nobel prizes and controversies. The vacillation of security prices is often measured by a coefficient of variation within the Black-Scholes formula published in 1973. Volatility is implicitly defined as the standard deviation of the yield of an asset. The value of an option increases with volatility. The higher the volatility the greater the option’s chance during its life to be “in the money” – convertible to the underlying asset at a handsome profit. Without delving too deeply into the model, this mathematical expression works well during trends and fails miserably when the markets change sign. There is disagreement among scholars and traders whether one should better use historical data or current market prices – which include expectations – to estimate volatility and to price options correctly. From “The Econometrics of Financial Markets” by John Campbell, Andrew Lo, and Craig MacKinlay, Princeton University Press, 1997: “Consider the argument that implied volatilities are better forecasts of future volatility because changing market conditions cause volatilities (to) vary through time stochastically, and historical volatilities cannot adjust to changing market conditions as rapidly. The folly of this argument lies in the fact that stochastic volatility contradicts the assumption required by the B-S model – if volatilities do change stochastically through time, the Black-Scholes formula is no longer the correct pricing formula and an implied volatility derived from the Black-Scholes formula provides no new information.” Black-Scholes is thought deficient on other issues as well. The implied volatilities of different options on the same stock tend to vary, defying the formula’s postulate that a single stock can be associated with only one value of implied volatility. The model assumes a certain – geometric Brownian – distribution of stock prices that has been shown to not apply to US markets, among others. Studies have exposed serious departures from the price process fundamental to Black-Scholes: skewness, excess kurtosis (i.e., concentration of prices around the mean), serial correlation, and time varying volatilities. Black-Scholes tackles stochastic volatility poorly. The formula also unrealistically assumes that the market dickers continuously, ignoring transaction costs and institutional constraints. No wonder that traders use Black-Scholes as a heuristic rather than a price-setting formula. Volatility also decreases in administered markets and over different spans of time. As opposed to the received wisdom of the random walk model, most investment vehicles sport different volatilities over different time horizons. Volatility is especially high when both supply and demand are inelastic and liable to large, random shocks. This is why the prices of industrial goods are less volatile than the prices of shares, or commodities. But why are stocks and exchange rates volatile to start with? Why don’t they follow a smooth evolutionary path in line, say, with inflation, or interest rates, or productivity, or net earnings? To start with, because economic fundamentals fluctuate – sometimes as wildly as shares. The Fed has cut interest rates 11 times in the past 12 months down to 1.75 percent – the lowest level in 40 years. Inflation gyrated from double digits to a single digit in the space of two decades. This uncertainty is, inevitably, incorporated in the price signal. Moreover, because of time lags in the dissemination of data and its assimilation in the prevailing operational model of the economy – prices tend to overshoot both ways. The economist Rudiger Dornbusch, who died last month, studied in his seminal paper, “Expectations and Exchange Rate Dynamics”, published in 1975, the apparently irrational ebb and flow of floating currencies. His conclusion was that markets overshoot in response to surprising changes in economic variables. A sudden increase in the money supply, for instance, axes interest rates and causes the currency to depreciate. The rational outcome should have been a panic sale of obligations denominated in the collapsing currency. But the devaluation is so excessive that people reasonably expect a rebound – i.e., an appreciation of the currency – and purchase bonds rather than dispose of them. Yet, even Dornbusch ignored the fact that some price twirls have nothing to do with economic policies or realities, or with the emergence of new information – and a lot to do with mass psychology. How else can we account for the crash of October 1987? This goes to the heart of the undecided debate between technical and fundamental analysts. As Robert Shiller has demonstrated in his tomes “Market Volatility” and “Irrational Exuberance”, the volatility of stock prices exceeds the predictions yielded by any efficient market hypothesis, or by discounted streams of future dividends, or earnings. Yet, this finding is hotly disputed. Some scholarly studies of researchers such as Stephen LeRoy and Richard Porter offer support – other, no less weighty, scholarship by the likes of Eugene Fama, Kenneth French, James Poterba, Allan Kleidon, and William Schwert negate it – mainly by attacking Shiller’s underlying assumptions and simplifications. Everyone – opponents and proponents alike – admit that stock returns do change with time, though for different reasons. Volatility is a form of market inefficiency. It is a reaction to incomplete information (i.e., uncertainty). Excessive volatility is irrational. The confluence of mass greed, mass fears, and mass disagreement as to the preferred mode of reaction to public and private information – yields price fluctuations. Changes in volatility – as manifested in options and futures premiums – are good predictors of shifts in sentiment and the inception of new trends. Some traders are contrarians. When the VIX or the NASDAQ Volatility indices are high – signifying an oversold market – they buy and when the indices are low, they sell. Chaikin’s Volatility Indicator, a popular timing tool, seems to couple market tops with increased indecisiveness and nervousness, i.e., with enhanced volatility. Market bottoms – boring, cyclical, affairs – usually suppress volatility. Interestingly, Chaikin himself disputes this interpretation. He believes that volatility increases near the bottom, reflecting panic selling – and decreases near the top, when investors are in full accord as to market direction. But most market players follow the trend. They sell when the VIX is high and, thus, portends a declining market. A bullish consensus is indicated by low volatility. Thus, low VIX readings signal the time to buy. Whether this is more than superstition or a mere gut reaction remains to be seen. It is the work of theoreticians of finance. Alas, they are consumed by mutual rubbishing and dogmatic thinking. The few that wander out of the ivory tower and actually bother to ask economic players what they think and do – and why – are much derided. It is a dismal scene, devoid of volatile creativity. Read the full article