Volatility has declined very sharply , so quite naturally , pundits suggest that investors are complacent and conditions are ripe for a nasty surprise. Such warnings deserve harsh criticism.
First, volatility should be down, given the performance of the economy and markets. Second, focusing on volatility encourages short-term thinking, which is extremely harmful to investors trying to achieve their long term goals.Third, it is entirely useless to warn against a potential market decline when the warning is provided without any kind of time framework.
