Is risk predictable?

clock • 3 min read

Neil Michael, executive director of investment strategies at London & Capital, explains the tools that can be used to predict volatility and de-risk portfolios.

Market volatility either fills us with excitement or makes us want to run for the hills; one person's meat is another person's poison. But what is it? Volatility is essentially the degree to which markets swing around, particularly on the downside. One common measure of volatility is the VIX volatility or ‘fear' index, which measures the degree of uncertainty about the S&P500 index, based on options prices. We can see from chart 1 that the index is similar to a heart monitor, with big spikes in the index being associated with economic heart attacks, like the collapse of Lehman Brother...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Budget 26: Stamp Duty on shares to be swapped for Securities Transfer Tax

Budget 26: Stamp Duty on shares to be swapped for Securities Transfer Tax

By late 2027

Patrick Brusnahan
clock 28 October 2026 • 1 min read
Investment tax relief rises by smallest amount in four years amid recent Budget measures

Investment tax relief rises by smallest amount in four years amid recent Budget measures

Bowmore Financial Planning research

Jack Roach
clock 28 October 2026 • 2 min read
Defaqto to launch rating for newer funds and portfolios

Defaqto to launch rating for newer funds and portfolios

Combines Defaqto and RSMR expertise

Jen Frost
clock 27 October 2026 • 2 min read