Yet there is a paradox. If the Economic Policy Uncertainty Index gets too low, things may go seriously wrong.
- The EPU index was low in August 1987. The stock market crash followed a few months later.
- Another low occurred in August 1997. It was already after the Asian financial crisis, but the worst was yet to come in 1998.
- October 1999: A few month before the NASDAQ peaked.
- March 2005: Well, nothing special happened to the markets in a year or two this time.
- July 2007: An ominous time: by the end of July 2007, first signs of a crisis were seen in the venture capital market (not yet in the stock market, though.)
- On the other hand, August 2011 was a great time to buy stocks. So was February 2009 and March 2003. September 2001 wasn't bad, either, and January 2001 was a brilliant time.