Stock market volatility has been extremely low for the past couple of years, which is unusual and is actually raising concerns among traders.
What’s the point? Traders need volatility to make a living, so that group would obviously be most concerned. That said, we think there are some fundamental factors that may be contributing to low volatility including a growing concensus around 1) global economic growth, 2) general (market) environmental risk, and 3) investment strategy. As investors (as opposed to traders), we view this as neither “good” nor “bad”. As investors, we need to have an understanding of the macro environment. If, in fact, global growth is slower than expected (which is negative for earnings), this could be offset by continued demand for financial assets that can provide strong or growing cash flow, such as high quality dividend-paying stocks. Continued demand for these types of stocks could potentially offset the risk of lower valuation due to economic concerns.
Link: http://money.msn.com/top-stocks/post--why-is-a-calm-market-so-scary