This is undoubtedly the most frequently asked question posed to me. The answer is, which market?

I believe that most people ask in the context of the headline news they hear on their favorite news or business channel. That is typically U.S.-centric, with a heavy focus on the indices representing the largest companies in America.

When I think of the “market,” my mind goes about a million miles an hour because to me, the market means anything that may reasonably be included in an investment portfolio.

That may include, but is not limited to: U.S. equities, developed foreign equities, emerging market equities, U.S. fixed income, Foreign fixed income, real estate, closely held businesses, precious metals and oil, interest rates, currency and many other asset classes in which you may invest.

To the professional, it is really impossible to answer that question with one word or a savvy made-for-TV sound bite.

Depending on which headline news you want to believe, any world markets can be in good or bad shape. Contrary to the opinions of economists prior to the election and to those who are still protesting the results, U.S. companies appear to be optimistic about some of the economic and policy changes being bantered about as the cabinet for the new administration is formed.

U.S. fixed income markets, however, have not fared well since the election. The long standing fear that an interest rate rise may harm your fixed income portfolio is happening as we speak.*

Advocates for fixed income, however, contend that the drop in fixed income values pale in comparison to an equity market downturn and that there are measures that one can take to mitigate harm from rising interest rates. Some of these measures include shortening the duration of your fixed income portfolio and evaluating fixed income investments with rates that can adjust upward.

In case you’ve been in a cave since the financial crisis, U.S. equity markets have outperformed most global markets for the past 7 or 8 years.

Based upon fundamental characteristics such as unemployment, inflation and strength in the U.S. dollar, it appears as if that trend is still intact. But because no one can tell me exactly when, and what will cause that trend to end, I believe that it is not wise to avoid exposure to some of the other markets aforementioned.

Headline news, world events and the occasional hard-to-predict rare event will always impact the value of any investment. But remember that this cuts both ways. Remember Brexit? The financial world was falling on the days immediately following that surprising move. Some markets got clobbered, but most have recovered to erase those losses and reach new highs.

Volatility is here to stay, and may even accelerate due to electronic trading and the pace at which news travels. And in the end, the returns you make, are related to the risks you take.

*Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

John P. Napolitano CFP, CPA is CEO of U.S. Wealth Management in Braintree, Mass.  Visit JohnPNapolitano on LinkedIn or The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. John Napolitano is a registered principal with and securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through US Financial Advisors, a Registered Investment Advisor. US Financial Advisors and US Wealth Management are separate entities from LPL Financial. He can be reached at 781-849-9200.