2022 Market Summary: Where We’ve Been and Where We’re Going

I’ve received this question a lot lately. “Thomas, where are we with the markets right now?” Let’s summarize.

January: Investors started the year with a nice solid punch right between the eyes in January as it began to become widely understood that the Federal Reserve would begin to raise its key interest rate in 2022. This news wasn’t shocking, but the equity markets began to “price in” that move, immediately discounting equities to brace for a higher interest rate environment. The Standard & Poor’s 500 (S & P 500) ended January down 5.26%.[1]

February: Russia. Ukraine. The timeline here goes much further back than February, as we know, but this is essentially when it became serious enough for the markets to react. On February 6th, the Russian military build-up was large enough to understand something was in the works. On February 11th, the United States national security adviser noted that an invasion could take place within days. On February 21st Russia deployed troops to eastern Ukraine, and sanctions began. February 24th was the day it became an official invasion. The stress this event put on the equity markets was profound. The demand for oil soared, the supply chain was further disrupted, and the stability of global markets was in serious question. At this point, year-to-date, the S & P 500 was down 8.23%.[2]

March: The month of March was a breath of fresh air for the equity markets. Presumed clarity around the geopolitical situation in Europe began to take place, investors viewed the first two-month drop as an opportunity to buy equities at a discount, and the Fed raised its key interest rate, as expected in mid-March, bringing some stability to the markets. Through March 31st, year-to-date, the S & P 500 was down 4.95%.[3]

April: April showers bring… May flowers? Hopefully, that’s true because it rained in April. All the relief we thought we were seeing in March turned itself around in April. The March inflation data came out on April 12th with an intense 8.5% increase from the previous year, which then set the table for Federal Reserve Chairman Jerome Powell to indicate a higher than anticipated rate hike in May “was on the table”. The events surrounding inflation plus the clear indication that the conflict between Russia and Ukraine won’t be stopping anytime soon created a rain shower of backward movement in April. At this point, year-to-date, the S & P 500 was down 13.31%.[4]

Present Day: So here we are. I am concluding this text on the afternoon of May 5th in my office in, ironically, rainy Omaha, Nebraska. Yesterday, Jerome Powell raised the key interest 50 basis points, just as expected, and brought his own semi-positive outlook to the economy by saying, “I think we have a good chance to have a soft – or softish – landing our outcome if you will.”[5] With that, the markets rallied immediately on Wednesday, only to resume its bear hunting on Thursday.

So, back to the beginning. That’s where we are. The next question I get asked is, “Where are we going?” If I truly knew I’d be writing this from my private island, but I’ll do my best to guide us on what makes sense.

The market craves stability. It craves an understanding of how the companies that make the market are going to be profitable and make money. From day one of 2022, it’s been confused about how its companies will be profitable. Conflict in Europe, inflation, rising interest rates, employment, rinse, and repeat. All those factors have brought market instability, hence the volatility we’ve seen. Until the data begins to show that the Federal Reserve is taming inflation by raising the interest rates, the market will continue to be volatile. It needs answers for its companies.

Will there be a recession? At some point, yes! Recessions are natural parts of the business and market cycles. They happen, whether we like them or not. It’s worth noting, a recession is defined as two consecutive quarters of negative GDP growth. Knowing that we’re already halfway there, as the first quarter numbers of GDP drew back at -1.4%. One way or the other, recessions are inevitable.

The question now becomes, “Well, what do I do?” It’s the most boring answer ever, and one that is sure to receive an eye roll or two. You stick to your plan. You trust your plan. You don’t allow the emotions of all the red numbers on television to disrupt your plan. That’s what you do. (Insert: dozens of eye rolls).

Using the recessions we’ve seen in the U.S. since 2000 (only because I know if I go back to 1893 I’ll lose all my readers to boredom), if you stuck to your plan, and stayed invested, you have come out on top. If you were able to weather the 2001 recession you profited in the long run. If you weathered the GREAT RECESSION in 2008-2009, you profited in the long run. If you weathered the 2020 recession (do we even need to revisit that?), you have profited (the S & P 500 is still up 52% from the bottom in March of 2020).[6]

It’s not flashy, it’s not cool, it’s not something you search the internet to read, but it’s the truth. You can’t accurately and consistently time the market and because of that, you’ll never know when to get out and when to get in. If you have a long-term plan, the best thing to do is to keep history in perspective, trust your plan, and wait for the rain to end. The sun always returns.

If you have questions on how to best develop your long-term financial plan, our advisors at BerganKDV can help. Contact us today and we would be happy to assist you.


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Diversification and asset allocation do not ensure a profit or guarantee against loss.

The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

The views expressed are those of BerganKDV Wealth Management. They are subject to change at any time. These views do not necessarily reflect the opinions of any other firm. Investment advisory services and fee-based planning offered through BerganKDV Wealth Management, an SEC Registered Investment Advisor.


[1] Retrieved on 2022-05-05 from https://finance.yahoo.com/chart/

[2] Retrieved on 2022-05-05 from https://finance.yahoo.com/chart/

[3] Retrieved on 2022-05-05 from https://finance.yahoo.com/chart/

[4] Retrieved on 2022-05-05 from https://finance.yahoo.com/chart/

[5] Retrieved on 2022-05-05 from https://www.barrons.com/articles/fed-may-meeting-interest-rate-decision-51651617874

[6] Retrieved on 2022-05-05 from https://finance.yahoo.com/chart/

CATEGORIES: Featured | Wealth Management
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