Investors should be careful as the recent spike in market volatility is far from normal, according to the manager of the California State Teachers’ Retirement System


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Investors should be careful as the recent spike in market volatility is far from normal, according to the manager of the California State Teachers’ Retirement System, which has more than $200 billion in assets.

“The last few days have been abnormal volatility,” Christopher Ailman, chief investment officer at CalSTRS, told CNBC during a special aired Thursday night. “The volatility we saw earlier in October and November, I went on and said that was expected. That’s typical when you have a bull market that’s so old and so late in the economic cycle. But the last few days are abnormal because the machines are really picking over more than human beings.”

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Ailman’s comments came after another wild session on Wall Street. The Dow Jones Industrial Average closed 260 points higher on Thursday, erasing a 611-point plunge from earlier in the day. Thursday’s rally also follows a historic day in the U.S. stock market Wednesday, with the bluechip index posting its biggest one-day points gain in history.

Those moves took place after Wall Street logged its worst Christmas Eve performance ever on Monday. “That’s normally a quiet day and that was crazy to see that decline,” Ailman said.


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Investors have been on edge lately as they worry about a possible monetary policy mistake from the Federal Reserve, an ongoing U.S. government shutdown, U.S.-China trade talks and a possible economic slowdown.


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But Ailman says investors should look at the bond market for clues about the economy rather than stocks.

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