We all enjoyed the investment markets in 2017. The values of investments climbed gradually throughout the year with almost no declines. In fact, 2017 was a historically calm year in terms of stock market volatility.
2018 is shaping up to be a very different year. January delivered exceptionally good performance for stock markets around the world. Bonds, conversely, had negative performance to start the year due largely to the expectations of rising interest rates.
After peaking on January 26, 2018, the stock markets around the world have now given up all of their gains from earlier this year. The reversal of the market direction has not been enjoyable for investors, but it is more normal than what we experienced in 2017.
Our diversified approach to investing appears to be working well thus far in 2018. While most investors awoke on February 6th to portfolio balances that were quite a bit lower than where they were to start the year, Oak Wealth Advisors’ clients have had better experiences. Three of the four complementary strategy mutual funds we use in client portfolios are still in positive territory year-to-date and they have dampened the volatility in the portfolios.
We will continue to monitor the markets but our discipline and focus on each individual investor’s investment policy will guide our actions. Investors who get greedy and exceed their equity allocation targets or overreact to market volatility will be the ones who will suffer the worst investment performance assuming market volatility is back.
If you have any questions about your investment portfolio or your planning, or you just want to discuss the market volatility, please contact me.