Much of the uptick in volatility experienced in early 2018 continued into the end of the year and remains a factor in early 2019.  Our Portfolio Manager Julio Quinteros addresses the increase in volatility as the market shifts away from a synchronized global growth view to one that is now navigating a variety of global risk factors.

Despite a more tenuous global backdrop, the prospects for the U.S. economy remain positive and supports the case for higher interest rates. A higher interest rate backdrop will likely result in further market volatility as stock valuation expectations adjust to interest rate moves. This month, Julio Quinteros discusses a rising interest rate environment as a significant variable that limits market returns, and could spill into other areas of the U.S. economy.

Despite a noisy backdrop, at the midway point in 2018, U.S. equity indices are leading their global counterparts. This month Allen Trust Company’s Portfolio Manager, Julio C. Quinteros, Jr. discusses the recent divergence in performance between U.S. and international markets, with a focus on year-to-date weakness in emerging equity markets.

Through the first half of March it is now clear that increased volatility in financial markets is a constant to take into account and balance as part of our investment considerations. While we acknowledge that risk factors are higher, volatility on its own does not give us pause. We remain focused on long-term investment opportunities. This month, Julio Quinteros discusses the rise in volatility and resulting ebb and flow of markets. Despite higher volatility, we remain grounded in our investment approach.