Dow, S&P at five-year high; VIX drops to five-year low

Traders work on the floor of the New York Stock Exchange on Jan. 22, 2013 in New York City.

This final note today -- a little bit existential, I'll grant you, but somehow appropriate on a day when two of the three major stock indices closed at five-year highs.

There's another index we might want to pay heed to today. It's called the VIX, also known as the volatility index, or the fear index -- a measure of how worried Wall Street is about what's coming down the pike.

Not at all worried, it seems. The VIX is at five-year lows this week.

And I just wonder if maybe we don't want Wall Street to be just a little bit afraid.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
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Is there an urban myth index for the VIX? When Wall Street gets smug, it's time to sell. So, the Markets are at all time highs, but is that adjusted for inflation? I'm thinking that my dollars are so watered down that you should pop another 10 to 15% on to the high bar to cover for the 5 years of dollar devaluation.

Hello Kai,
I enjoy your show and the closing comment you made today on the Vix got me thinking. Markets are reaching 5 year highs, even all time highs, and that would be a time to be worried about a downturn. However, it may be better to put these high levels in context. We are only getting back to where we were 5 years ago, before bankers, brokers and real estate hucksters laid the economy low. Even more than that, we are less than 25% higher than we were at the beginning of this century. Please consider doing an update on the "lost decade" story. It is stretching into a lost century for many of us that started investing in the 90s. We saw an increase of 175% in the 20th century bubble and have been treading water ever since. Just graph the Dow from 1995 to the present and the picture is clear.
So, should we be worried now? Not so much.

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