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How Do Markets Perform After "Low Volatility" Years Like 2017?

Market volatility was exceedingly low in 2017. The VIX index that measures market volatility plunged 35% in 2017 and presently sits near all-time lows. Moreover, the S&P 500 fell no more than 3% over the course of the year, matching the smallest intra-year decline since World War II.

How has the stock market fared after previous “low volatility” years? On the whole, stocks ended higher, but with at least one significant drop during the course of the year. Indeed, it is a common feature of financial markets that stability breeds instability, as calm periods encourage investors to take more risks.

Accordingly, while we remain fundamentally positive on the economic and financial market backdrop, we believe investors should be prepared for a bumpier ride in 2018.

DISCLOSURE:This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.

DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.
Investment Advisory Team
Hefren-Tillotson

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Hefren-Tillotson Inc. is a leading diversified financial services firm providing investment and retirement plan management and comprehensive, financial planning through MASTERPLAN® for individuals and businesses. The firm’s wealth management services are administered by Certified Financial Planner (CFP) professionals, Chartered Financial Analyst (CFA) Charter holders, attorneys, Chartered Life Underwriters, and CPA/PFS’s. Hefren-Tillotson offers corporate services including 401(k) retirement planning, executive financial counseling, fiduciary reviews and workplace financial planning seminars. Founded in 1948, the firm is headquartered in Pittsburgh and has offices located in Pittsburgh, Butler, Greensburg, North Hills, and South Hills.