Following a painful and broad fourth quarter selloff, risk assets rebounded in the first weeks of 2019 as optimism has grown about Fed accommodation, earnings, China stimulus and an eventual trade dispute resolution. However, investors should be prepared for choppy markets, especially through the first half of the year.

Whether or not one believes in the “October Effect,” investors can’t be blamed for giving it credence this year. Worries about trade, the Federal Reserve and global growth roiled the markets as the fourth quarter began. Even U.S. equities—which had roared through the third quarter as investors focused on positive economic data—succumbed to the selloff that gripped risk assets.

Fears of an imminent U.S. recession are premature; tax policy and a more business-friendly regulatory environment provide long-term catalysts for the economy. Although conditions outside the U.S. are less encouraging, positive global growth should continue, albeit with growing divergence among countries.

Our current positioning reflects the following beliefs: Many of 2017’s positive economic tailwinds should continue in 2018, setting the stage for additional upside in stocks and other equity-sensitive assets, including convertible securities and high yield bonds.

Markets are once again facing a proverbial wall of worry, built of political uncertainty, populism, and fiscal and monetary policy concerns. Although the market’s ascent is not likely to be straight up (it never is), we are cautiously optimistic that the wall can be surmounted.