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Joe Davis: Given recent headlines and market volatility, we really know that the importance of Vanguard’s investment philosophy and that long-term perspective that we all share, that’s when its strength truly is magnified. Certainly we’ve seen market volatility increase around the financial markets around the world. We’ve seen concerns emanating particularly around liquidity in the financial markets and in certain financial institutions.

Now importantly, we have seen some policy responses, both in Europe as well as in the United States, that in my judgment address some of the root causes of some of this recent market volatility. And ultimately, policymakers will always remain focused on broad-based financial stability, but we also shouldn’t confuse that with saying that we will not see financial volatility at times in the months ahead.

Which brings us to our economic and market outlook. At the beginning of the year, our investment and market outlook was one focused primarily on inflation, which is something that we’ve all had to deal with in our personal lives. It has come down a little bit, but it’s certainly still elevated and our forecast for the months and quarters ahead remains unchanged and that is we will continue to see inflation come down, but that so-called “disinflation,” it will come at some cost. A cost in terms of a slowing economy in the United States and all parts of Europe and other developed markets around the world. And I think policymakers, over the course of this year, they may have some more normalisation of interest rates to do to ensure that price inflation comes down to a more reasonable and manageable level.

Bringing inflation down was never going to be easy and we were going to see an economic slowdown associated with that course. But as both an economist and as an investor, I would also underscore that having a more stable and manageable inflation rate is perhaps one of the most important long-term outcomes for all of us as investors.

So in the months ahead, market volatility may come and go. And for all of us, I think it’s important to remember to focus on what we can control. It’s that balance and diversification in our portfolio and, most importantly, it’s sticking to our plan, because in sticking to our plan, it increases the odds we will be successful in helping to achieve our long-run goals. And part of those long-run goals of being successful means staying invested in the markets, because it’s market risk that is part of what leads to the long-run portfolio growth, but ultimately leads to us being successful on our plan.