Flip A Coin 🤔

The market looks calm on the surface, but the calm is expensive — valuations sit at the 90th percentile of their own 20-year history, leaving almost no cushion for any negative surprise. The VIX (a measure of expected market volatility) at 15.21 is nearly a full standard deviation below its trailing-year average, making protective puts unusually cheap right now. Core PCE (the Fed's preferred inflation gauge) at 3.3% keeps the Fed on hold, while the 10-year Treasury yield's quiet 2bp drift lower hints that bond markets are beginning to price in softer growth ahead. With options cheap and three live geopolitical flashpoints unpriced by vol, buying downside protection on high-multiple names — starting with large-cap tech and healthcare — is the highest-conviction use of today's low hedging cost.