‘High returns with low risk’: Why wildly unpredictable economic data is a reason to buy stocks, according to one Wall Street chief strategist

BusinessInsider USA Images The gauge last peaked at 3.5 after the financial crisis, well into its highest quartile. The coronavirus pandemic will keep the metric above 13 for at least a year, the strategist said in a note to clients.

Historically, the S&P 500’s average annualized one-quarter returns reached 21.2% whenever the Economic VIX sat in its upper quartile. When the gauge stood in its middle two quartiles, the index only returned an average of 6.5%.

"An explosive Economic VIX is always unsettling," Paulsen said, but investors willing to ride out the storm of negative data are […]

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