Robert W. Baird

Exploring the costs and benefits of two alternative investment approaches.

After several years of muted volatility, the January roller coaster in the stock market caught many investors off guard. Coming into the year, we thought 2016 held the potential to see an uptick in volatility, but had expected the usually strong seasonal tailwinds to delay significant weakness until after the first quarter.

Fed Chief Janet Yellen raised interest rates 25 basis points. Although this was the first rate hike in nine years, the impact on the markets is not anticipated to add to volatility. Bottom Line: Fed removes uncertainty over rate hike – broad market should expand beginning late next week.

Certain seasonal adages will doubtless sound familiar. "As goes January, so goes the year" seems to be repeated as a rule sometime in early February, while "Sell in May and go away" reflects not only the conditioned expectation of summer weakness, but also a preference for sayings that rhyme. Perhaps the proliferation of these sayings partially explains why the actual timing of cyclical shifts can catch some investors off guard.

The Federal Open Market Committee (FOMC) is the monetary policymaking body of the Federal Reserve System. This article provides a behind the scenes look at recent changes in the composition of FOMC voters, characterizing them as a dove, focused more on higher employment, or a hawk , concerned more with the central banks inflation targets. One of the implications from this analysis is that the Fed will be more reluctant to raise interest rates next year than most people think.