Investors had a vastly different experience in 2016 than in 2017. Although, both ended up being very good years if you stayed invested. Three difficult corrections in 2016, along with a very late rally in the stock market kept people on their toes. In 2017, investors were untested as there were no corrections to speak of as we trundled upwards for most of the year.
So, which one is normal? 2017 may well be called the year of the unicorn with only 8 trading days having moves of 1% - 2% and none above 2%. This may never happen again. We believe that this low volatility coupled with attractive investment returns in equities has created an environment for misguided investor expectations.
We have always said that the only thing we know for sure about markets is that volatility will always exist, so surely the return of volatility is inevitable. How we deal with this volatility is up to us. Dave Goetsch, executive producer of The Big Bang Theory, gives us his thoughts on how his perspective of the markets has changed and how that has helped him deal with the randomness of markets.