David Kelly, JPMorgan Asset Management's chief global strategist, said December's market volatility was caused largely by passive and momentum investors, rather than active managers concerned about fundamentals.

He said that much of the market is not decided "by millions of little Warren Buffetts thinking carefully about the value of stocks," but rather by pre-set indexes and algorithms.

Market swings that "are not validated by an actual problem" in the economy will fade, Kelly said.

Stocks erased sharp losses in a choppy trading session Thursday. After earlier dropping more than 600 points, the Dow Jones Industrial Average erased losses and settled more than 250 points higher, up about 1.1%.

Much of the blame for recent market volatility falls with two types of investors, David Kelly, JPMorgan Asset Management's chief global strategist, said on a Thursday call with clients and media.

Economic fundamentals, from jobs to earnings, look positive, he said, leading him to place responsibility for this month's series of sharp sell-offs on two groups: passive and "momentum" investors – those which buy and sell through algorithms and automatic trading systems.

"One of the things we have to get over is the impression that this market is being decided and determined on a day-to-day basis by millions of little Warren Buffetts thinking carefully about the value of stocks. It was never quite like that and it’s not like that today," Kelly said. "Over time, you’ve gone from markets moved by individual and institutional investors who were at least thinking about the value of stocks, although they were very prone to bouts of fear and hope, to a market which is more and more dominated by passive or momentum investors."

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Overall, Kelly said that growth rates are slowing but show no signs of weakness, a promising signal. He also pointed out that, over the holiday season, trading volume is thin and active managers and executives "are off on vacation."

"These wild swings in markets have always occurred. You always have some volatility – that’s the price you pay for being in equities," he said. "But when [the swings] are not validated by actual weakness in earnings or increases in interest rates – they’re not validated by an actual problem – then they will tend to fade."

Kelly highlighted one opportunity for investors: with the market down 15% since the start of the quarter, it may be time to buy.

JPMorgan Asset Management managed $1.7 trillion as of September 30.

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