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Volatility is back, but don’t give up on 2018
Markets have finished most years with positive returns, even after a sharp midyear decline
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Volatility has returned to global markets in 2018, but investors should not assume the worst for the remainder of the year. Temporary swings are a normal part of equity markets and are often influenced by short-term news such as earnings announcements and economic data releases. In fact, it’s unusual for markets to be as calm as they were in 2017. And even after sharp declines, market turnarounds can happen quicker than one might think. Intrayear declines in the S&P 500 have averaged 14% since 1976, but index returns were positive in 31 of those 41 annual periods. The lesson for investors is it often pays to remain calm and stay the course.
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Past results are not predictive of results in future periods.
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