• Just over one quarter into 2018, today’s investment environment is very different from that of 2017. Last year, U.S. stocks rose nearly 22% and experienced little volatility along the way.1
  • Market momentum largely continued into January 2018 as the Dow Jones Industrial Average completed its fastest 1,000 point gain ever – in just eight days.2
  • Since then, conditions have changed drastically. In February 2018, the S&P 500 Index recorded its first negative monthly total return in the past 16 months followed by a 2.5% drop in March.3
  • As the chart highlights, stocks also have experienced significantly wider swings in 2018 than they did last year. For example, the S&P 500 Index has experienced moves of 1% in 28 of 70 trading days, or 40%, compared to just 8 of 251 days in 2017.
  • Looking further into 2018, we believe there are numerous additional sources of volatility, including potential inflationary pressures, global central bank deleveraging, fiscal and trade policy uncertainty and the potential for a more active Federal Reserve.
  • With these in mind, investors may be well served in preparing their portfolios for further volatility during the rest of the year.

1 S&P 500 Index.
2 The Wall Street Journal, https://on.wsj.com/2Dm2qFI.
3 Bloomberg.

The chart of the week and any accompanying data is for informational purposes only and shall not be considered an investment recommendation or promotion of FS Investments or any FS Investments fund. The chart of the week is subject to change at any time based on market or other conditions, and FS Investments and FS Investment Solutions, LLC disclaim any responsibility to update such market commentary. The chart of the week should not be relied on as investment advice, and because investment decisions for the FS Investments funds are based on numerous factors, may not be relied on as an indication of the investment intent of any FS Investments fund. None of FS Investments, its funds, FS Investment Solutions, LLC or their respective affiliates can be held responsible for any direct or incidental loss incurred as a result of any reliance on the chart of the week or other opinions expressed therein. Any discussion of past performance should not be used as an indicator of future results.