Client Newsletter – April 2018
The Return of Volatility
Since the election in 2016, I have cautioned our clients to pay attention to the fundamentals of the markets and the economy and ignore the headline news. That advice has served us well during this time. Events that were unbelievable, except they happened, rocked the markets, causing periodic turbulence. Still the economy improved over the moribund previous years, and the markets rallied strongly. But, had you watched CNBC and taken their comments to heart, or read newspaper headlines, you could be frightened out of your mind. Many investors were frightened and fled the market, to their detriment.
The year 2017 was a remarkable year for investors, despite the political turbulence, as the market surged during this period of remarkable calm as measured by the volatility index. According to the volatility index (VIX), volatility never traded above 19 all 2017.