The volatile Chinese market swings experienced in the first half of the year demonstrates the real problem of investing in China. Western investors are not accustomed to the lack of market transparency, and yet Chinese growth potential as a component of world GDP demands attention. Investors face the difficult task of investing with confidence in a highly volatile market they are not sure is trustworthy, while reconciling these risks with the importance of the massive Chinese economy.

A sharp turn in market prices, as experienced in the Chinese market in recent months, is usually caused by the use of borrowing and frothy expectations. When momentum investing is prominent, it is usually accompanied by leverage to derive a larger return when cash is not available.

Ignited in 2013 through 2014 by a globally-coordinated recovery and extremely accommodative monetary policy, Europe’s economy was poised to gain traction after the global financial crisis and eurozone sovereign debt crisis.

Passive investing is the investment of assets into an investment vehicle designed and mandated to track a particular index. The most tracked index in the world in terms of assets and investment product offerings is, of course, the S&P 500 Index. Other examples could be the Russell 2000 Index (small cap domestic equity), the Barclays Aggregate Index (total domestic fixed income), or the MSCI EAFE Index, which is the standard institutional international equity index.

After years of crude oil above $100 per barrel, intensive capital investment in energy extraction and rising production caused an imbalance in demand and supply. Extensive supply led to a precipitous decline in oil prices globally, which has pressured some exploration and production to reassess future production plans and to determine whether further extraction could be formidable going forward.

The market reaction to an eventual increase in the Federal Funds Rate has wide implications going forward. Loose monetary policy from the Federal Reserve helped stimulate the economy at the beginning stages of the recovery, although it has lost significance as the economy returns to normalcy. Federal Open Market Committee (FOMC) members recognize this, but would rather wait for clarity before modifying monetary policy.

The U.S. consumer is poised to build strength into 2015 as the U.S. economy improves, labor market conditions solidify, and input costs remain historically low. Improved purchasing power for consumers is a result of the U.S. dollar improving on the prospects of a stronger economy and supply imbalances in commodities. Oil prices fell, which drove gasoline prices under $3 and greater discretionary income for U.S. consumers. These factors are largely a result of Federal Reserve action and economic growth, as market participants no longer find zero-interest rates critical to the success of the economy.