As reported in an article posted on the HCR Wealth Advisors website, the stock market last year (2017) experienced historically-low volatility with the largest pullback only -3%. Veteran investors are aware that in the past, stock markets have undergone typical pullbacks in double digits, giving the impression that the action within the stock market last year was quite tranquil for most portfolio managers, and everybody wonders if the market will have a higher volatility in 2018.
The most probable answer would be, yes, the market will certainly be better in 2018 given that 2017 had a low one. However, only time will tell if the anticipated volatility will be mild or more severe. It could be impacted by a shift in policy in China, a spike in bond yields, or a geopolitical incident among many other events.
There are plenty of favorable factors within the market which investors could count on to be positively hopeful. For one, the U.S. economy continues to gain strength, where the latest data for the economy showed constant progress in nearly every metric, many achieving heights that have not happened in more than 10 years. The global economic recovery has been observed to be a coordinated one across the globe. And this is illustrated by the accommodating behavior of the global central banks in the recent past, which is definitely a good sign of the improving worldwide economy.
The Federal Reserve continues to project interest rate hikes for 2018. With the improvement in the economy last year, the Federal Reserve raised the interest rates three times, and it is expected to institute another three rate hikes this year should the financial situation continue to be positive.
HCR Wealth Advisors is a registered investment advisory firm that assists clients in buffering the volatility of the financial markets by formulating a comprehensive plan to help them reach their financial goals.
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