All bear markets are painful, but each has its unique mix of causes, and each is painful for its own reasons. The standout characteristic of the current market is the simultaneous decline in stock and bond prices.
(...) the second quarter of 2022 was challenging for investors. Stocks officially fell into bear-market territory. Bonds sold off, too. Technology stocks and cryptocurrencies crashed, triggering bankruptcies or closures of several crypto lenders and hedge funds.
Financial markets got off to a rocky start in 2022 as inflationary pressures, tightening monetary policy, a Covid resurgence in China, and the outbreak of war in Ukraine led to a selloff in both stock and bond markets. The S&P 500 experienced its first negative quarter since the onset of the pandemic two years ago. Growth stocks were hit especially hard, with the Nasdaq 100 Index declining nearly 20% before recovering to finish the quarter at a 9% deficit. Even bonds were no haven, with the Barclays Aggregate Bond Index falling 6%--its worst quarterly return in almost 40 years (...)
The return of inflation worries is an unwelcome change for investors and makes the current environment challenging. While this development will likely lead to short-term volatility, it is in more difficult times that sticking with a well-thought-out, long-term plan is most important.
An overview of the 3rd quarter in investing, Facebook issues, and a look ahead to potential tax planning opportunities.
Equity markets continued their strong march upward in the second quarter, though leadership among sectors and asset classes shifted somewhat as investors grappled with conflicting data on the pace of economic recovery, as well as mixed signals on monetary policy from the Federal Reserve. Nevertheless, every asset class in client portfolios once again notched positive returns for the quarter (...)