MARKET UPDATE | Fourth Quarter 2017

Adam Recker, CFA, CFP® & Michael Furla, CFA

MARKET SPOTLIGHT: VOLATILITY

As we reflect on the final quarter of 2017, it’s safe to say we had an interesting year. We saw a lot of political volatility across the globe—as the ongoing sparring and saber-rattling between the US and North Korea took center stage late last year. We also saw hurricanes and wildfires throughout 2017 that devastated parts of the country, disrupting lives and economic growth.

Despite some disheartening headlines, the stock market continued its march onward and upward, unabated. Market volatility, as measured by the VIX, has been below a reading of 10 for a total of 54 times in the last 20 years. Incredibly, 46 of those instances (or 85%) have occurred since last May. This is also the first time in history that we’ve gone an entire year without a monthly loss in the stock market.


KEY TAKEAWAYS FOR INVESTORS
  • Political volatility and disheartening headlines do not always translate into stock market volatility, as we saw in 2017.
  • Investors should exercise caution when betting on Cryptocurrencies, as such highly-speculative assets can suffer extreme downturns.

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