January 2019: December Reminded Us There Is No Free Lunch

Greater Risk Led to Bigger Losses

We’ve been on quite the roller coaster ride in the last quarter of 2018. Market volatility has returned. Perhaps that is a sign of a more normal market environment, but that’s not the point of this Envestat. Market volatility often drives investors into emotional and perhaps irrational behaviors. So it matters how a portfolio is constructed and managed.

Given the extreme volatility in December, we thought we would look at performance and standard deviation data for both advisor-driven models and fund strategist portfolios (FSPs) that month to see how market volatility has affected clients on the Envestnet platform.