Investing is a delicate balance between greed and fear, but with markets declining over the last month due to a variety of headlines, investors have gravitated much closer to fear. The most common “fear gauge” of the stock market is the CBOE VIX index, measuring the expected volatility (standard deviation of returns) of the S&P 500 (SPX) over the next 30 days. The index entered the year around multi-year lows, but with selloff after January, the index has doubled after settling around 28. 

When it comes to the VIX, markets tend to perform best during periods of extremely low or high volatility, with investors cruising in stability or rebounding out of potentially oversold and volatile territory. Meanwhile, a VIX between 20 and 30 can be a no man’s land. When the VIX was between 27.5 and 30, the S&P 500 averaged a one-year return of 8.9%, with levels between 20 and 27.5 being even more muted. However, movements above 30 or below 20 could signal a more bullish outlook for the market given historical tendencies. Additionally, there are some other positive signs from the current VIX.

Another way to interpret the VIX is using the rule of 16, which states that the average daily change in SPX is equal to the VIX divided by 16. Presently, our reading of 28 divided by 16 is 1.75, meaning that the market is expecting an average daily move of 1.75% over the next month. However, the market has yet to see a single day with that magnitude of movement over the last month, with the most recent 1.75% up or down day occurring on February 6th. Meanwhile, the realized volatility of the S&P 500 over the last month has been approximately 13, or the equivalent of an 0.8% average daily move. Consequently, the market expects the next month to be roughly twice as volatile as the previous month, marking a significant disconnect between recent and expected volatility.

When the market is expecting volatility to increase significantly from recent levels, it has historically been a signal that the market is overly fearful. For context, the current 15-point premium between the VIX and realized volatility ranks in nearly the 99th percentile of instances. When the VIX was ten points higher than trailing volatility, the S&P 500 gained an average of 5% over the next three months, highlighting that similar instances may have displayed excessive fear.

While overall volatility levels place us in cautious territory, investors appear to be overly fearful in the near term given the expected increases in volatility and consensus negative sentiment. Warren Buffett once said, “Be fearful when others are greedy and greedy when others are fearful.” With the market moving into fearful territory, it wouldn’t be surprising to see investors become greedier over the coming weeks, even with unanswered questions about the long-term outlook of the market.

Breadth in the fixed income market is the narrowest it has been in several months as most US core groups now sit near the bottom of the Asset Class Group Scores fixed income rankings. Meanwhile, high yield spreads have widened recently suggesting a risk-off posture towards credit, making this a challenging environment for investors seeking yield. With that in mind, we though this would be an opportune time to update our check-a-month strategy. The check-a-month strategy involves buying a group of high-yielding, quarterly-dividend-paying stocks with dividend payment dates spread across the quarter so that the client receives a dividend check(s) each month.

When building a check-a-month portfolio, it is essential to select not only high-yielding stocks but also stocks with a healthy technical picture to better stack the odds of future outperformance in your favor. After all, your client won't be impressed with their 3% yield if the market value of their portfolio drops by 15%. Looking only at dividend yield, we found that there are 114 stocks in the S&P 500 with a dividend yield of 3% or higher. However, when we narrow our search using a technical overlay, we are left with 32 stocks. A list of all the criteria we inputted in the Security Screener tool is below:

S&P 500 Universe

Price = >$10

Trend = Positive

Technical Attributes = 3+ 

Dividend Yield > 3%

You will find all 32 names in the table below categorized into three groups based on their usual dividend payment schedule. We've highlighted a couple of our favorites below the table. 

Early Quarter Dividend Payout (January, April, July, October)

Mid-Quarter Dividend Payout (February, May, August, November)

Late Quarter Dividend Payout (March, June, September, December)

CFG Citizens Financial Group Inc ($58.61) - Banks – CFG is a 5for 5’er that ranks ninth of 168 names in the favored banks sector matrix and carries a 3.17% yield. CFG has demonstrated long-term relative strength versus its peers as it has been on an RS buy signal against the NDW Bank Index (DWABANK) since 2017.  On its default chart, the stock returned to a buy signal this week when it broke a double top at $60, but remains below the middle of its trading band, offering a potentially opportune entry point for long exposure. Year-to-date (through 3/25) CFG has gained 1.73% on a price return basis.

DRI Darden Restaurants, Inc. ($198.87) - Restaurants -DRI is a 4 for 5’er that has been on market and peer RS buy signals since 2020 and 2021 respectively and carries a 3.06% yield. On its default chart, DRI has completed four consecutive buy signal, most recently breaking a double top at $216 last month. DRI has subsequently pulled back to form significant support at $196, as the stock has reversed up from that level three times since January. Year-to-date (through 3/25) DRI has gained 9.59% on a price return basis, outperforming the S&P 500 (SPX) by more than 13%.

Daily Option Ideas for March 26, 2026