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The Opportunity In Volatility

By: Heather Rupp, CFA, Director of Research for Peritus Asset Management, the sub-advisory firm of the AdvisorShares Peritus High Yield ETF (NYSEARCA:HYLD)

It seems the best way to sum up on the markets of late is with the word "volatile." We've seen surprise moves on the currency and interest rate front from the likes of Switzerland and Canada and the launch of quantitative easing in Europe. Russian hostilities are once again heating up and talk of a Greek euro exit. Oil continued to hit new multi-year lows during the month. There have been many major earnings disappointments, as factors such as a strong dollar and weakening demand weigh on multinational corporations. Q4 GDP came in weaker than expected. Thus, in January, we saw the Dow Jones Industrial Average move more than 100bps on the majority of the trading days in the month and both the Dow and S&P 500 fall over 3% on the month. We've seen the 10-year Treasury yield fall from 2.17% to 1.68% and the 30-year Treasury yield fall from 2.75% to 2.25%, a decline of a whopping 49bps and 50bps,…