Then and Now
After a historic lack of volatility last year in the equity markets, the beginning of 2022 has been choppy to say the least. In April alone, the S&P 500 experienced its worst monthly performance (down 8.80%) since March of 2020, while the Nasdaq (down 13.2%) had its worst monthly performance dating back to October of 2008. Even traditionally conservative assets, such as bonds, did not escape the turmoil. Existing bonds declined in value, as interest rates have risen significantly since the beginning of the year. To give some perspective, the average 30-year fixed mortgage rate at the end of the month of April stood at 5.53% compared to 3.37% at the end of the year in 2021. The 5-year Treasury note yield increased from 1.26% to 2.92% over the same time period.
Below are the major market indices Year-To-Date Performance thru April:
Dow Jones Industrial Average: -8.7%
S&P 500: -12.9%
Inflation and rising interest rates, along with the Russian invasion of Ukraine and supply chain issues, are the root cause of the volatility. While we understand the anxiousness of seeing the market drop, it is also a common occurrence. Decisions guided by the short-term can have long-term implications.
As always, we welcome calls and emails and completely understand if any client has questions or concerns. Please do not hesitate to reach out to discuss your personal situation and we will continue to keep you updated as we move forward.