There's money to be made or lost with an increase in volatility. Be sure that you have an excellent sense of the market.
I'm not sure if I'm reading your chart right, but it appears that your volatility measurement on the chart is the 5 period average true range of the monthly S&P price. While this 5 period ATR is currently roughly the same as from 1997, the underlying index value is currently about double what it was in 1997. As a result, in percentage terms, the current volatility is only half of the 1997 value.