US stocks fell on the last trading day of 2022, closing out the worst year in more than a decade for global equities and bonds.
TheS&P 500 was down almost 20% in 2022. Bonds lost about 16% as inflation surged causing central banks worldwide to hike interest rates. Most investors hold some mix of stock and bonds, and because both asset classes fared so poorly, typical balanced portfolios struggled as well.
“We’ve never seen a market environment like this where both stocks and bonds were down simultaneously,” Art Hogan, Chief Market Strategist at B. Riley Wealth, said recently. “The good news is that we will soon put the year in the rear-view mirror.The bad news is that 2023 could be a bumpy ride, at least for the first few months. Weaker economic trends will likely form heading into 2023 as the Fed battles inflation, but a mild recession may help set stocks up for a better second half of the year.”
We agree that markets will likely remain choppy for the next few months until central banks signal that inflation is moderating and they will stop raising interest rates.
· We were pleased that the Quintessence Wealth Elevate Low Volatility Pool was up4.8% in this very difficult environment. Our goal is to have this Pool continue to act as a solid core for portfolios of more risk averse clients.
· The QuintessenceWealth Elevate Global Equity Pool was down 15.6% -- not out of line for an all-equity pool. Our Q Wealth Portfolio Managers continue to add option strategies that are designed to participate in the upside of equities while squeezing out some of the volatility.
We all hope the inevitable rebound comes soon! Best wishes from all of us for a happy, healthy and prosperous 2023.
