Most investors end up with over-diversified portfolios that are costly and deliver poor performance. The typical asset allocation model and subsequent investment in a group of diversified funds often results in a portfolio of “Global Mush” with literally thousands of tiny positions.

Recently, the markets have gotten a lot noisier with the return of volatility and amplified rhetoric around trade concerns and monetary policy. They are not likely to get any quieter with the midterm elections just around the corner. For the average investor it can be overwhelming and hard to know when to be concerned and when to tune out the noise. The market dashboard below shows that, while things may be noisy, there is no indication of an impending economic or market meltdown.

While stocks deliver unpredictable returns in the short-run, stocks are the least risky choice to build wealth over longer time periods. As the investment horizon increases, loss of purchasing power becomes the main risk.

After last year’s tranquil environment, markets experienced a sharp pullback in February and have returned to a more normal level of volatility. As a result, many investors are wondering, where are we now and what’s next? The chart below highlights how recent events compare to the prior 11 corrections.