Also in 2015, divergence in monetary policies
unsettled developed currency
markets: the European Central Bank and the Bank of Japan continued quantitative easing programs while the Federal Reserve rhetorically led
markets on a long, slow walk to the first increase in the fed funds rate since the
global financial crisis.
Momentum, for example, was the top - performing factor in 2007 when equity
markets were strong, but it was the worst performer in 2008 when the
global financial crisis hit.3 These swings in performance can be
unsettling to many investors, causing them to sell and potentially miss out on rebounding performance.