Markets Have Challenging Third Quarter
Global equity markets had a poor third quarter with all major markets in the red, leading to overall declines not seen in decades. Further, entering the fourth quarter of 2022, the DJIA and S&P 500 are both at their lowest since November 2020, while NASDAQ is at its lowest since the end of July 2020.
For the third quarter of 2022:
- The DJIA dropped 6.7%;
- The S&P 500 fell 5.3%;
- NASDAQ lost 4.1%; and
- The Russell 2000 declined 3.6%.
The worries that drove market performance in the third quarter were the same ones that drove markets in the first two quarters and towards the end of last year. The two most dominant issues continue to be inflation and the Fed – with the former rising to 40-year highs and the latter causing Wall Street to worry that the course of rising rates would lead to a recession.
The other themes were at odds with one another at times: rising consumer and investor confidence; rising food and gas prices, negative GDP numbers, a cooling-off of the housing market, better than expected manufacturing data; not-so-great corporate earnings, continued supply-chain bottlenecks and more social unrest.
Market Performance Around the World
Investors were unhappy with the quarterly performance around the world, as all 36 developed markets tracked by MSCI were negative for the third quarter of 2022 – with most recording negative returns in the double digits.
We’re Here for You
At Patriot, we will continue to focus on what we can control – asset allocation, costs, and having a plan. In the coming months, we will look for the opportunity to rebalance our client’s portfolios and take advantage of any tax-loss harvesting opportunities.
We consistently communicate the importance of diversification through low-cost index funds, reasonable withdrawal rates, and not trying to time the market. Maintaining a disciplined asset allocation and a reasonable withdrawal rate helps one endure challenging times like this.
We know the markets will recover, but it is still hard to endure these downturns. If you want to talk and review your allocation or your goals, we are a phone call or e-mail away.
Sources: bls.gov; umich.edu; census.gov;; msci.com; fidelity.com; nasdaq.com; wsj.com; morningstar.com