<p>Volatility is back. After more than a year of record calm in stock markets, the VIX index of S&amp;P 500 volatility briefly hit 50 as it exploded upwards last week.</p>

<p>In the fullness of time, markets are a finely-tuned valuation machine. Risk and reward is weighed in countless transactions allocating capital to the places where it does the most good for society. But in the short-term it looks a bit like a dog’s breakfast.&nbsp;</p>

<p>In Iceland, there’s an old saying: if you don't like the weather, wait 15 minutes.&nbsp; Since the start of this year, the markets have proven just as changeable as the fickle Icelandic climate.&nbsp; Earlier this month, the VIX index of volatility – Wall Street’s “fear gauge” – briefly hit the heady heights of 50, marking the biggest one-day rise in the history of the index and its highest level since August 2015.</p>

<p>Weathering the markets last week wasn’t too dissimilar to weathering the roads: challenging, and not necessarily good for morale. Markets closed down on Friday; the FTSE 100 had fallen&nbsp; -2.3% during the week and the S&amp;P 500 -0.6%. February closed to the downside across major markets.</p>

<p>Last Friday was a momentous day. Not only did it feel like Spring may finally be in the air, but it also marked the nine-year anniversary of the start of the current bull market. Yes, the previous bear market officially ended on 9 March 2009 following a 17-month bloodbath that saw US markets fall by 57% – the second-steepest peak-to-trough decline since 1932.</p>

<p>Last week the UN World Happiness Report 2018 revealed that Finland is the world’s happiest nation. In contrast, the US slipped five places to 18th in the global ‘happiness’ rankings. The S&amp;P500 fell 1.6% over the week in sympathy, amid fears of rising trade friction and fallout from the political merry-go-round at the White House. UK shares fell too.</p>

<p>When Donald Trump won the presidency in November 2016, we believed he would struggle to make headway on virtually all of his flagship policies.</p>