The historic low levels of volatility have helped equity markets grind higher over the past few years. However, as the stocks hit new highs and benchmarks balloon to record levels, there is a growing concern the market may be veering dangerously close to bubble territory.
Indices like the S&P 500 are led by volatile sectors such as technology -- the largest constituent of the index -- that are prone to sharp downturns, triggering turbulence that can quickly spread to other sectors.
Therefore, although equity market volatility has been the lowest in a decade, this may be an opportune time for investors to make some portfolio adjustments and hedge against potential market turmoil that can impact their portfolios. Bargain hunters may want to keep a close eye on stocks as widespread market selloffs tend to turn up great buying opportunities.
