If your portfolio took a beating in 2022, you’re not alone. There were few places for investors to hide as nearly every corner of the financial markets posted big losses.
In addition to stocks spending most of the year in a bear market, many parts of the bond market posted their biggest losses in history, meaning fixed income failed to live up to its traditional role of providing a cushion to ride out the decline in equities. In the background, decades-high inflation remained much hotter than expected, interest rates surged, and fears of a looming recession were key contributors to a painful year that most investors would rather forget.
Only a very narrow section of the stock market—truly defensive names such as stable, high-dividend payers—offered shelter from the storm.
The fourth quarter brought some relief, but not enough to have changed the outcome: 2022 was a year for the record books—and usually not in a good way.