This is what generally happens to actions after periods of high volatility

Periods extreme volatility on the stock market may feel painful For investors – but such periods are generally followed by solid stock market yields, if history is a guide, according to market analysts.

In this sense, many investors would be wise not to sell share – and may even be buying more, analysts said.

THE VIX indexalso known in the gauge for fear of Wall Street, measures the estimate of the volatility market expected in the S&P 500 Stock market index.

When the VIX increased to a level higher than 40 – indicating “significant” volatility – the S&P 500 increased by 30% a year later, on average, according to an analysis of the Wells Fargo Investment of the market from January 1990 to April 16, 2025.

The chances that stock market yields were positive 12 months later were also greater than 90% during these periods, the analysis revealed.

In other words, volatility creates a “potential opportunity,” wrote Edward Lee on Monday, an analyst in the investment strategy of Wells Fargo, in the analysis.

“The concern is normal, but history has taught us that periods of higher volatility have historically led to higher yields,” Lee wrote.

So, why is there a greater probability of positive and higher stock yields compared to periods of lower volatility?

Volatility “tends to coincide with high retirement and panic times of investors, which leads to higher probabilities of investing the success of the next 12 months,” Lee wrote in an email.

The volatility of actions increased in early April after President Donald Trump unexpectedly announced Prices specific to the country and the S&P 500 Sold almost 11% in two days.

The VIX reached around 53 wrote Last week.

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But low expectations often lead to “rescue rallies”, when people grow back in actions because the initials did not think it, wrote Cox.

For example, since 1990, around half of the 14 S&P 500 sales of 10% or more have ended in the week following the highest vix fence, and three ended on the day of its highest fence, wrote Cox.

These sales are generally “V-shaped”, which means that there is a net slowdown, then a quick rebound, she said in an interview with CNBC.

However, things could be different this time, she said.

“We are trying (always) to know where the new center of gravity is located” with commercial policy, said Cox.

“The unexpected part of the sales news probably exceeds us, and if you are a long -term investor, it's probably the time to start buying,” said Cox. “But you cannot expect it to be the bottom of the sale. And the story is not always the Gospel.”