Market volatility remains elevated on continued trade tensions

Mike Loewengart, Vice President of Investment Strategy

E*TRADE Capital Management

12/07/18

It’s been a rough week in the markets and stocks appear poised for another down day. Despite largely positive economic news, investors are concerned about tariffs and escalating trade disputes—particularly with China.

Not all bad news for diversified investors

One piece of good news for diversified investors is that bonds are rallying. The 10-year Treasury note gained ground this week, with yields falling back under 3% for the first time since early September. Bonds are fulfilling their historical role of providing ballast to diversified portfolios.

Maintain a long-term focus

Investors with long-term financial goals may want to keep current volatility in perspective. While volatility may at times seem intense, the levels we’re seeing in the market are not especially high within a historical context, and US equity markets are only around 10% below all-time highs reached in September. In addition, we are still above the lows seen in February, April, and October.

Although it’s never easy to watch the value of your portfolio decline, this is exactly the sort of environment in which broadly diversified portfolios invested across a wide array of asset classes are designed to work best.

Finding long-term opportunity

Regardless of market conditions, it’s critical to allocate assets based on one’s own individual goals and risk tolerance. By diversifying appropriately and looking past near-term noise, investors stand the best chance of weathering volatility and achieving their long-term financial objectives.

Thanks for reading,

Mike Loewengart

Vice President, Investment Strategy

E*TRADE Capital Management, LLC

Mike Loewengart is the Vice President of Investment Strategy for E*TRADE Capital Management, LLC. Mike is responsible for the asset allocation and investment vehicle selections used in E*TRADE’s advisory platforms. Prior to joining E*TRADE in 2007, Mike was the Director of Investment Management for a large multinational asset management company, where he oversaw corporate pension plan assets. Early in his career, Mike was a research analyst focusing on investment manager due diligence for the consulting divisions of several high-profile investment firms. Mike holds series 7, 24, and 66 designations, as well as the Chartered Alternative Investment Analyst (CAIA) designation. He is a graduate of Middlebury College with a degree in economics.