2022 Q4 Market Commentary…

From the June 15 lows, the stock market experienced a relief rally lasting one full month before falling back to re-test its lows of the year by the quarter’s end. These are the moves typically experienced when a market is under duress – often referred to as “bear market rallies” and “bear market selloffs”. Out of this volatility, a noticeable behavioral pattern develops among investors. When markets are fiercely advancing upward, investors catch a case of “FOMO” – the fear of missing out – and they want to be “all in”. Conversely, when markets are fiercely declining in value, investors get panicked and want to run for the exits. These traits only become amplified when these market gyrations occur on a day-to-day basis.

In 2022 so far, both the stock and bond markets have suffered greatly at the hands of inflation, slowing growth, and corporate earnings declines. Here are your year-to-date numbers:

Q2 2022 Commentary…

As expected, it was a very choppy first quarter for the stock market. As we turned the calendar over to 2022, the market gave us that stomach-churning feeling you get when you realize you are at the apex of the rollercoaster climb and now see what’s in front of you. From January 1, it was a swift ride down to a low point in early March before climbing about halfway back up by the end of March.

All of the same economic headwinds from the second half of 2021 have carried over into 2022 with a couple of new ones to boot. Rising gas and food prices, supply chain backlogs, increasing mortgage rates, and slowing economic growth have continued to stymie some of the excitement investors had previously held for the “Post-COVID re-opening” economy. The major differences between 2022 and the last half of 2021 is that some of the largest mega-cap growth stocks began to show cracks in their armor. When heavyweight stocks fare poorly, the index performance usually reflects it. That’s been the case so far in 2022.

Q1 2022 Commentary…

Happy New Year! It’s only fitting that our quarterly newsletter would be affected by supply chain issues. If you didn’t notice the difference, we can only credit the capabilities of today’s laser printer technology. Unfortunately, ordering official letterhead in late November did not allow for a lengthy enough window to receive a fresh stock by January 1.

2021 was a strange year in so many respects. Here’s a reminder of some oddities we experienced…
• American workers were incentivized to not return to work
• COVID variants ran amok
• Inflation reached its highest level in 40 years (CNBC.com)
• 2/3 of stocks that make up the S&P 500 Index hit 52-week lows while the S&P 500 index set all-time highs (Leon Tuey, Financial Post)
• 93% of companies on the S&P 500 saw their shares slide 10 percent or more at some point in 2021 (Taylor Telford/Rachel Siegel – Washington Post 12/31/21)
• Crude oil prices roared back into the mid-80’s in October due to reduced supply (Yahoo Finance – historical prices)
• Krispy Kreme became publicly traded again (let’s call this one a blessing and a curse)
• Dogecoin advanced 3,400%, and most people don’t even know what it is