Market Watch 2018 Q1 - Mosaic’s Quarterly Market Commentary

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This is a tale of two market environments.Q1 2018 Market Returns illustration for Market Watch blog post

As clients can see in their quarterly reports, the one-year numbers show strongly positive returns with very few exceptions.

In contrast, the first quarter of 2018 was a different story. First quarter numbers were negative in a majority of investment asset classes.

It remains to be seen whether this represents the beginning cracks in the long growth run we’ve enjoyed since the end of the great recession in early 2009.

After experiencing relatively calm markets in 2017, volatility returned in the first quarter of 2018. Bond prices fell as interest rates rose, while US and international stocks declined. With tensions heating up between the US and leading communist countries (including potential trade wars with China, nuclear tension on the Korean Peninsula, and the expulsion of Russian diplomats), there is a great deal of uncertainty on the global stage, which all contributed to a weak first quarter.

The outcomes weren’t terrible, but all of this is a change from the positive growth trends we’ve enjoyed recently.

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Looking ahead

Renewed market volatility does not shake our belief that the underlying fundamentals of our economy are still solid; we expect the economy to maintain a positive momentum. Keep in mind the economy and the stock markets don’t always move in tandem—though markets are ultimately driven by corporate earnings and the strength of the economy.

As with any long-term oriented investment, it is important to maintain your discipline, stay true to a sound underlying investment strategy, and keep your focus on your goals.

As investment managers and financial planners, it is our hope that we can help you stay consistent and achieve those goals.



Related: What level of investment risk are you most comfortable with?

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Topics: Investments, Market Commentary