Beneath Markets’ Calm Are Signs of Growing Investor Caution

Earlier, the Nikkei index in Japan closed down 1.29 percent, while the Kospi index in South Korea ended down 1.10 percent. European stocks were also lower, with London down 0.56 percent and Frankfurt down 1.12 percent.

Prices of United States Treasury securities — often in demand in times of turmoil — rose early in the day, driving their yields, which move in the opposite direction, lower. But Treasury prices gave up ground in the afternoon, and the yield on the benchmark 10-year Treasury note slipped to 2.25 percent, from 2.26 percent on Tuesday.

Gold futures rose 1.59 percent, to $1,282.40 an ounce.

Gold tends to outperform stocks when the markets are sliding, so it is unusual for such a conservative investment to beat equities when they have been on a tear as has been the case this year.

What is driving this anomaly, some say, is a recognition that eventually investors will not be able to ignore recent headline risks — whether nuclear tensions with North Korea, a trade war with China or a debt ceiling crisis in Washington.

“There has been a Pavlovian response by investors to disregard any piece of bad news or any spike in volatility, and that has been a very profitable strategy,” said Russ Koesterich, a portfolio manager for BlackRock’s $39 billion Global Allocation Fund. “But we do think that there are risks in the world that are not being priced in.”

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To Mr. Koesterich’s point, some of the best-performing investments in the world this year have been exchange-traded vehicles that investors can use to bet against the VIX, the Chicago Board Options Exchange Volatility Index, better known as Wall Street’s fear gauge.

The VIX rose nearly 9 percent on Wednesday after Mr. Trump’s comments about North Korea, before settling up just 1.37 percent, at 11.11 for the day. The index has been…

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