After enjoying one of the most placid years on record during 2017, volatility came roaring back to the markets both early and late in 2018. The market fluctuated violently leading up to the Christmas holiday and suffered its worst December since 1931, declining 9.2%. Fortunately, our conservative positioning proved highly beneficial during this period. The sharp correction was triggered by investors rapidly reassessing the risks underlying their financial assets. As we have discussed and emphasized at length for the past 18 months, we are very concerned about growing risks being ignored by the market. Since the financial crisis, central banks have been encouraging risk-taking behavior which comes with unintended consequences, such as lowered lending standards. In this letter, we discuss how investors have been pressured to take on more risk and how that has created instability in many asset classes.