2022 - The Hangover

Hello everyone! Happy New Year, and welcome back to the boodle blog! If you're new here, on this page we offer our analysis on what is happening in the market that may affect our stocks & mutual funds. If you're a returning reader, then feel free to use this blog as a tool to help you determine how best to manage your portfolio holdings. We produce one blog a month for each month of the year. As a tradition, in January we take a look back at the previous year and opine on what went right, and what went wrong. So, with that in mind, let's take a look back at 2022 and do a postmortem market analysis. In the year 2022, we were coming off a 26.89% return in 2021, things were a bit shaky with the pandemic and supply chain issues, but boodle took a "wait and see" attitude early in 2022. We got our first red flag that something was wrong when January closed with a loss. This is a bad sign because we have noticed over the years that "as January goes, so goes the market". This signal was borne out by Fed Chair Jerome Powell who stated that interest rate hikes were coming soon due to high inflation that the country was experiencing and the sluggish economic growth. The earliest we were able to share our concerns with our clients was in the February 2022 edition of the boodle blog.
As the year unfolded, it became increasingly clear that equity prices (stocks & funds) would have a tough time with asset appreciation and thus, a Bear Market was born in 2022. As we tiptoe into the new year, this bear market remains entrenched. 2022 was a rollercoaster ride, and not in a good way. The DOW finished down 8.78%, while the S&P 500 shed 19.44% of its value- not the textbook 20% loss that defines a bear, but close enough. The NASDAQ suffered the biggest loss with a 33.10% collapse.
These losses translate to more than $10 trillion dollars in asset depreciation. Investors who were enamored with Crypto currencies lost 70, 80, 90% of their holdings. We even saw a Crypto Exchange; FTX go bankrupt after losing billions in client assets. No one likes to lose money, and at Boodle we take portfolio losses seriously. Our portfolio recommendations are designed to adhere as close as possible to a benchmark Index, such as the S&P 500. Boodle believes that equity growth will make a comeback in 2023. We blogged about it a couple of months ago in the November blog post, and we are on record as stating that economic conditions will improve, and that taking a discipled approach to your portfolio will serve you well. Remember, inside every bear market is a bull market being formed. The Bull market feeds on collapsing share prices, while a Bear market feeds on appreciating share prices. Our indicators, many of which we have followed since 1999 are telling us to be patient and disciplined in 2023. A new bull market will emerge, and your portfolio should be in a position to take advantage of future market advancements. Next month we will shed additional light on what we expect will be a more market friendly environment for our boodle members and readers. Until next month, have a wonderful year, stay focused and we look forward to bringing you our most up to date information to help you become a successful stock market investor!