Sell Side View: Peter Quinton, Head of Research at Bell Potter shares his view on the implications of low share market volatility

Sell Side View: Peter Quinton, Head of Research at Bell Potter shares his view on the implications of low share market volatility. Share market volatility is very low reflecting the usual situation in a rising market, investors buying the dips in the very strong search for yield, and the very low volatility in global earnings per share. Some commentators have drawn the intuitively attractive conclusion that very low share market volatility is a sign of investor complacency and, therefore, an imminent collapse in share prices. However, statistical analysis reveals that there is no historical relationship between volatility levels and future share market performance. Indeed, volatility around the current low levels has tended to be associated with good future share market performance.