2022, Don’t Let the Door Hit You on the Way Out

Good riddance to 2022! By all accounts, it was a tough year for every investor. The global stock market shrank by over eighteen trillion dollars. With interest rates rising, it was the worst year ever for fixed income/bonds- as we have been anticipating for some time. (As interest rates rise, bond values shrink.) Asset values were negatively impacted by the pandemic hangover, the war in Europe, the revaluation of so-called “meme” stocks, crypto currencies, and the Fed’s attempts to rein in inflation. A strong case can be made that valuations had gone from rich to speculative. Combine this with a shutdown of the economy and sometimes misguided government actions; it gave us the perfect storm for a bear market. With every passing day, we are closer to the next bull market. We are off the lows that we experienced in October. It is our hope that was the bottom…that the worst is over. Our higher cash position and avoidance of fixed income investments helped us weather the storm. It is very rare that the market has losses in successive years.

The United States avoided recession in 2022. Current projections are that the economy should continue to grow in the first half of 2023. As the Federal Reserve’s interest rate hikes filter into the economy, we will find out if they have engineered a soft landing or put us into a recession. Since the market trades on expectations on where the economy will be six to nine months from now, the market will soon be looking to 2024.

Fidelity Investments is adding technology to allow clients to use e-signature to sign documentation. This requires all accounts to list a valid cell phone number and email address. We will be contacting those of you who do not have an email and/or cell phone listed on your Fidelity account. Thank you for your understanding as we work to keep your information up to date.

A word to the wise regarding the upcoming income tax preparation season, we cannot emphasize enough that it’s in your best interest to get your information to your tax professional early. Post-Covid, the accounting profession has been inundated with myriad changes to tax law. Contact us if your tax professional needs any information from Fidelity Investments.

Very truly yours,

Michael Cantlon
Thomas Guyett
Robert Gephart