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When the VIX Jumps, We Ask “How High?”
A volatility smoothie. That’s what happened when the market threw recent tech stock valuations, monetary policy, labor data, and global tensions in a blender and hit “pulse.” On November 20, the Cboe Volatility Index, also known as the fear gauge or VIX, hit 27.8 to reach its highest point since the tariff crisis in April.1
The VIX measures expected 30-day volatility in the S&P 500. When it surpasses 20, it typically signals heightened anxiety while surpassing 50 means all-out panic. The VIX hit 52.33 after the Liberation Day tariff announcements in April.1 But the difference with this most recent spike is that the concerns were more holistic as opposed to acute and specific. At the time of the spike, it was perhaps unclear whether that difference meant the volatility and market dip would be more prolonged, or if they would come back down to “normal” levels just as quickly.
By that point in November, the VIX had jumped 50% for the month,2 but steadily declined for the remainder of the month to end lower than where the month had started. The Liberation Day VIX spike came down at a similarly rapid pace. Historically, VIX spikes really don’t tend to last very long in general.1
Over the 10 previous instances in which the VIX surged 50% in a single month, the S&P 500 saw greater returns one year later than the historical 12-month average. Only three out of the 10 instances didn’t see gains 12 months later. These surging VIX events understandably engender fear and anxiety in investors as that’s exactly what it’s intended to measure. But the investors who tend to fare better in the long run are those who take a long-term view and navigate volatility with strategy.
In addition to simply staying invested through the mayhem and tuning out the noise as best as one can, adding targeted volatility management strategies to a portfolio can also help investors navigate VIX spikes like we saw in November and April.
TrueShares has a suite of volatility management ETFs that can help investors weather the storm by seeking to potentially limit losses on the downside, such as when the VIX spikes, while also aiming to achieve capital appreciation on the upside. The strategies maintain a goal of reducing volatility compared to the U.S. large-cap equity market.
So before the blender gets whirling again, sprinkle in some volatility management and your smoothie might just taste a little sweeter.
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Sources:
- https://fortune.com/2025/11/21/vix-cboe-volatility-index-highest-level-trump-tariffs-nvidia-tech-stocks-valuations/
- https://www.benzinga.com/markets/economic-data/25/11/49000073/vix-cboe-volatility-index-november-ai-trade-bubble-interest-rates-nvidia-earnings-historical-sp-500-returns-after-market-panic
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