Investing Newsletter - Jan 2023
Investing Newsletter (click image to open newsletter)
2022 was the seventh worst calendar year loss for the S&P 500 Index since the 1920s, down -18.1%.
The 13% drop in the Aggregate Bond Index for the year was over 10% greater than any other annual drop in this index’s history!
Value stocks and some alternative strategies such as trust deeds, hedged equity investments, and private equity may have helped reduce portfolio losses.
Since 1928, the S&P 500 Index has experienced two or more consecutive negative years just eight times.
The S&P 500 Index’s worst 11 years were succeeded by positive returns the following year six times and by negative returns five times.
When stock and bond markets decline, their expected future returns should increase.
After the Fed’s recent interest rate increases, banks have been slow to raise the yields they pay depositors; but money market yields have responded more quickly – presently yielding more than 4%.
The most important thing an investor can do during a bear market is to unemotionally stick to their plan while maintaining a long-term perspective.