The financial markets were volatile in the final quarter of the year as investors worried about the trade negotiations with China, the Fed raising rates too aggressively and the potential for a slowing global economy in 2019.

Interest rates fell sharply the last three months of the year; the 10-year treasury started the quarter yielding 3.07% and finished the quarter at 2.69%. The Barclays U.S. Aggregate Bond Index was up 1.6% for the fourth quarter and ended the year with a return of -0.08%. Large cap U.S. stocks, measured by the S&P 500 index, were down 13.5% for the quarter, which brought the 2018 return to -4.4%. Small cap stocks, measured by the Russell 2000, fell 20.2% for the fourth quarter and ended the year -11.0%.

For market updates, please visit www.nsinvest.com for Eric Kuby’s weekly commentary.

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