2018 Year End Review & Outlook

Market Overview: Volatility and the Return to Normal.

In 2018 volatility was present and notable. We first cautioned investors on the increasing likelihood for heightened volatility in our Q4:2014 Market Recap. After years of abnormally low volatility in equity markets, 2018 was a notable change with two strong sell-offs likely marking the end of the low volatility environment that generally characterized the prior decade (for more information see page 2 and 3 of our 2017: Mid Year Review and Outlook: https:// bit.ly/2tqpbkt)

Market consolidations are healthy and should be viewed as more normal (for more information see page 1 of our 2015 Year End Review: https://bit.ly/2TUIs9o) A reasonable level of volatility should be welcomed as it can present opportunities in both equity and fixed income markets that can prove beneficial to those employing a robust asset allocation policy. In the near-term the return to normal should be beneficial for markets, providing a base to move forward on the foundation of an already robust economy. Give our station in the economic cycle, we feel strongly that investors should be prepared for elevated volatility at more regular intervals. Numerous significant issues need resolution in the forward view which include: foreign and domestic central bank policy direction, divisive governmental politics (foreign and domestic), trade and tariff negotiations and the pace of global growth. These and other issues are likely to impact confidence and deliver volatility in financial markets through the balance of 2019.

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