2022 was a whirlwind of a year in the financial world and everything that happened was some way or another tied to inflation, says local Edward Jones Financial Advisor Ryan Painter. The DOW was down nine percent, the S&P 500 was down twenty percent, and the NASDAQ was down thirty-three percent. Furthermore, Painter also reports bonds went down and recorded their worst year ever in 2022:
“People think of bonds as a safety net from stocks. Typically, they are negatively correlated, meaning that when stocks go up, bonds might go down or when bonds go up, stocks go down. They don’t typically move in the same direction, but this last year both were down and not just a little bit. Stocks were down anywhere from eight to thirty percent and bonds were down about fifteen to sixteen percent last year. Historically bonds aren’t usually in the double digit negatives in a year. They can go down, but they don’t usually go down that much.”
Digging deeper into the outlook for 2023, Painter says when the Feds pivot and stop raising interest rates or begin to low interest rates again, the economy will recover, which experts anticipate interest rates to stop rising as fast this spring and begin to level off with the possibility of rates going back down toward the end of this year into next year.