Embrace high volatility

After a rather quiet and sustained bullish year in 2021, we are entering into a quite volatile year to date. VIX has been consistently above 20, a sign of nervousness in the market. However, for contrarians, this may not be a bad time to trade. As you can see in this next chart, over the past 31 years, when the VIX has spiked above 33.5, stocks have done exceptionally well over the subsequent year. In the past two weeks, VIX had shot up to 35 several times. If you buy when VIX is above 30 and hold it, the chance is high that you will gain nicely a year later. But I know rarely people have the guts to do so. That's why most people lose money in the market😏

Here's Jason Zweig with some good advice in the Wall Street Journal: How to Invest Calmly in a Chaotic World. Excerpt: Now that Russia has attacked Ukraine and emotions are running high, it might be tempting to get out of the market to keep your money safe, if you're feeling afraid – or to bet on what sounds like a sure thing, if you're feeling aggressive. But hasty decisions are often wrong, and big hasty decisions almost always are. You could try restructuring your portfolio to profit from a scenario that might unfold in the wake of Russia's invasion, like a boom in U.S. exports of natural gas, or rising inflation and higher military spending. The risk, though, is that scenarios that seem likely often don't materialize—and, even if they do, they can become too popular, eliminating the bargain prices that produce superior returns over time. A couple of things are pretty close to certain. One is that it's a bad idea to overhaul your portfolio when you're afraid. The time to become more conservative is when things are going well, not when the world seems to be coming apart.