Q4 and 2022 Market Review

In Q4 the stock and bond markets bounced off of their lows for the year despite being down in December . US stocks were up 7.18%, international stocks up 16.18%, and emerging markets were up 9.7%. Bonds in the US were up 1.87% and global bonds up 0.18%.

 In 2022 the stock market had the worst annual performance since 2008, down 19.21% in the US. International markets held up better, which has been rare in recent history, down 14.29%, though Emerging markets were down 20.09% for the year. Though not down as much as stocks, the bond market experienced its worst annual performance in decades due to rapidly rising interest rates to try to combat inflation. US bonds were down 13.01% and global bonds were down 9.76%.

 2022 was an especially difficult year given that both stocks and bonds were down significantly. Though 2023 will no doubt have continued challenges carrying over from last year, there is hope for stronger returns. Many challenges that markets faced in 2022 are easing, you can now get better returns on cash and fixed income investments, and the “reset” environment that I wrote about last month provides hope for a better year to come. Regardless of what 2023 has in store, it is important to maintain a long-term perspective as market corrections are a part of investing and long-term investors reap the rewards.  It is also important to review and update your plan. There may be opportunities to make adjustments and take advantage of the changing environment such as repositioning your cash to earn a higher yield, rebalancing your accounts to ensure your allocation is on target, and reviewing your personal plans to make sure they are in alignment with your financial plan.

 For a detailed market overview covering Q4 and all of 2022, click here.