Anything I've Ever Done that Ultimately was Worthwhile... Initially Scared me to Death

VIX (the ticker symbol for the Chicago Board Options Exchange Volatility Index) is:

A popular measure of the implied volatility of S&P 500 index options. Referred to by some as the fear index, it represents one measure of the market's expectation of volatility over the next 30 day period.

VIX has soared to 45 in recent days as fear and uncertainly has reigned supreme. While I am bearish on equities for a variety of reasons (valuation, economic slowdown, credit crisis, etc...), maybe I should reconsider. As the title of this post implies (a quote by Betty Bender), it has been worthwhile to invest when the markets price fear at this level.

Comparing the daily VIX level against the following 12 month returns of the S&P 500 (since 1990), equities have performed exceptionally well with VIX at similar levels.

In fact, looking at all periods when the VIX has ended the day above 40, the S&P 500 has averaged a return greater than 23% over the next 12 months.