Stocktake

Investors have endured a brutal six months

For the first time since 1974, bonds and stocks have fallen two quarters in a row at the same time

For investors, the first half of 2022 was one for the history books, but for all the wrong reasons.
For investors, the first half of 2022 was one for the history books, but for all the wrong reasons.
Proinsias O'Mahony's picture
Proinsias O'Mahony
Tue Jul 12 2022 - 04:00

For investors, the first half of 2022 was one for the history books, but for all the wrong reasons.

The S&P 500 sank 20 per cent, its worst start to a year since 1970. In fact, it ranks among the worst 3 per cent of all six-month returns in history, notes Ritholtz Wealth Management’s Ben Carlson.

Worse, there has been no place to hide. Ordinarily, bonds provide comfort in times of trouble, but not this year. For the first time since 1974, bonds and stocks have fallen two quarters in a row at the same time. Like equities, bonds have endured one of their worst ever six-month runs.

That has spelled trouble for investors holding a standard 60:40 portfolio of US stocks and bonds – 98 per cent of the time, says Carlson, returns have been better than what investors just lived through.

READ MORE

Unsurprisingly, it’s been a nerve-racking time for investors who pay close attention to their portfolios. Already, the S&P 500 has suffered 14 separate one-day declines of 2 per cent or more this year, notes Bespoke Investment, nine more than the entire total for 2021. Indeed, even though there are six months left in 2022, only 10 other years have seen as many large daily declines in their entirety.

Market bulls, adds Bespoke, can only hope the second half of the year will offer some relief.