Questions Investors Should Ask Amid Stock-Market Placidity

While last year's fund outflows and sour sentiment surveys suggest many investors may have missed it, stocks had just the kind of 2019 most investors would love. Not only was the S&P 500 up a whopping 31.5% (gains stocks have added to this year thus far), the ride was pretty smooth, too.[i] Neither US nor global stocks have had a 1% up or down day since mid-October—a roughly 3-month stretch of relatively placid markets. Even financial news headlines seem fairly sanguine of late, touting real or alleged positives like the US/China “phase one” trade deal signing, accommodative monetary policy and the prospect of rebounding corporate earnings this year.[ii] Our advice to investors: While sunnier sentiment seems rational, you should expect more chop ahead. In our view, this is a good time to remember market turbulence will eventually return—and mentally prepare for it.