To understate the obvious, it was a challenging fourth quarter for financial markets. Investor sentiment shifted daily from bullish to bearish. Equity markets sliced through most technical supports like a hot knife through butter. The S&P 500, Dow Jones Industrial Average, Nasdaq 100 and Russell 2000 fell intraday into bear market territory, loosely defined as a correction of 20% or more from the most recent highs (see figure 1), ending the year with the worst December performance since 1931.

December 31st marked the end of a disappointing year for most investors, with nearly all assets except for cash and government bonds booking losses.
Despite a strong recovery from the sell-off experienced earlier in the year, the S&P 500 gave it all back and then some in the month of December. The index declined -10.24% from top to bottom for the worst December since 1931, and closed 2018 down -6.24% in the red for the year for the first time since 2008.