2017 Q1 Vital Signs: Smooth Sailing, For Now
Capital markets have responded with persistent calm to an especially noisy time in American politics. In terms of market volatility, we’ve barely seen a ripple on the water. The VIX, Wall Street’s most popular volatility index, has barely crossed 14—a very low number by historical standards—since the day following last year’s election. As shown below, in Q1 we experienced the longest streak of market days with less than a 1% move over the last three decades. The unanswerable question on everyone’s mind: When will volatility spike again? A more important and more answerable question is: What do we need to own in our portfolios now that can provide diversification when it does?
Source: Bloomberg. Period shown is 1/2/1987-3/31/2017.
Past performance is not a guarantee of future results.
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