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3 Reasons Volatility Is So Low

Luck, strong fundamentals and a policy cushion have kept markets placid, says Vanguard economist Roger Aliaga-Diaz.

Christine Benz: Hi, I'm Christine Benz for Morningstar.com. Amid a placid and high-returning market, many investors are wondering how long it could last. I recently sat down with Roger Aliaga-Diaz, chief economist and principal in Vanguard's Investment Strategy group, to hear Vanguard's take on low inflation, low market volatility, and the firm's expectations for future equity returns.

One of the big puzzles for people who look at the markets is why volatility has been so low despite geopolitical concerns and other things that might in the past have caused volatility. Why do you think the markets have been so very placid?