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January 1, 2023

by | Jan 1, 2023 | Quarterly Letters

Dear Client: Returns for the major stock indexes in 2022 and the current bond and money market yields are as follows:   Index Year End 2022 Dow Jones Industrial Average    -6.98% S&P 500    -18.13%   Fixed Income Yields     1 year 2 year 5 year 10 year 30 year Municipals 2.82% 2.67% 2.56% 2.64% 3.63% US Treasuries 4.69% 4.43% 4.00% 3.87% 3.96%   Fidelity Government Cash Reserves Money Market Fund 3.91% Fidelity Money Market Fund Class Premium 4.35%   Happy New Year!  The equity market returns in 2022 were negative for only the third time in 20 years.  The S&P 500 index finished down 18% while the technology heavy NASDAQ closed down 33%.  The Dow Jones Industrial Average performed significantly better yet still down 7% for the year.  Perhaps more notable, the major bond market indexes had their worst year in recorded history, finishing down 13%.  Concurrently, the traditional 60/40 portfolio logged its second-worst year ever (-17.5%).  The markets have continued to make lower highs and lower lows throughout the year despite an October that marked the best month since 1976, and a fourth quarter up by 7%.  This calendar year’s market performance has been nearly the opposite of last year when the market climbed 28% without a single 10% correction.  The value stocks have been the top performers as the major value index funds were down 5%, though significantly better than the overall market.  Any way you look at it, 2022 was not a year to make money in the markets. The Federal Reserve Bank has (and continues to) put the brakes on the economy by...