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HERE ARE THE LATEST trends in the world of investing:

  • The S&P 500 fell 19.4% in 2022, after climbing 26.9% in 2021. Still, the shares in the S&P 500 are up 71.6% since the stock market bottomed in March 2020. These figures don’t include dividends.
  • The broad U.S. stock market, the broad U.S. bond market, developed foreign stock markets and emerging stock markets all suffered double-digit losses in 2022. But look more closely, and there was one notable trend: Value stocks fared far better than growth stocks.
  • Bonds provided investors with scant protection in 2022. The yield on the benchmark 10-year Treasury note rose to 3.88% from 1.51% at year-end 2021. As yields rose, bond prices fell, and the losses were especially severe for those holding longer-term bonds.
  • The Federal Reserve increased short-term interest rates sharply in 2022. One consequence: One-year Treasury bills were yielding 4.73% as of Dec. 30, up from 0.39% at year-end 2021. Those favoring cash investments should enjoy even higher yields in the months ahead, as the Federal Reserve continues to raise rates in an effort to subdue inflation.
  • Real assets had mixed performance in 2022. Oil prices rose to $80 a barrel from $75 at year-end 2021. Gold treaded water, closing out the year at $1,830, right where it finished 2021. Meanwhile, real estate investment trusts fell hard in 2022 as interest rates rose.
  • In December, the Federal Reserve projected that the U.S. economy would grow 0.5% in 2022 and 0.5% in 2023. What about unemployment? The Fed expects it to finish 2023 at 4.6%, while core inflation runs at 3.5%.
  • As of 2019, 52.6% of U.S. families were invested in the stock market, up from 51.9% three years earlier, but below the 53.2% peak recorded in 2007, according to the Federal Reserve’s Survey of Consumer Finances. The survey is conducted every three years.

Want to get a handle on stock and bond market valuations? Check out the chapter on financial markets.

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