Despite an impressive start to 2018, in February, global stock markets have exhibited above-average levels of volatility. Investors are asking, why now? What's behind these recent swings in stock prices?

At Randall Roberts, it is our view that the euphoria surrounding President Trump's tax cuts is waning, and that stock prices are now adjusting to the probability of higher interest rates, particularly in the US. The speed and scale of market gyrations - both up and down - appears to be magnified by the increased use of ETFs and derivatives among institutional portfolio managers.

For Canada, the story is somewhat different. Increasing uncertainty surrounding NAFTA, the implementation of more-stringent mortgage rules, and consumer debt concerns are current headwinds for the TSX. For these reasons and more, we feel that interest rates in Canada will not ascend at the same pace as those in the US. In light of these concerns, Canada's economy is performing ok, and is likely to benefit from US growth and higher energy prices.

What's confounding many investors is the fact that economic data - globally, not just in the US - remains very positive. Considering the strength and synchronization of global economies, we continue to support the inclusion of stocks in diversified portfolios.

Please click here for a more detailed report published by our Portfolio Advisory Group, summarizing the recent volatility. As always, we encourage you to reach out to Mark, Trevor, and the team should you have any questions or concerns.