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HERE ARE THE LATEST trends in the world of investing:

  • The S&P 500 fell almost 5% in 2022’s first quarter, after climbing 26.9% in 2021. Still, the shares in the S&P 500 are up 102% since the stock market bottomed in March 2020. These figures don’t include dividends.
  • The first three months of 2022 saw remarkably similar losses by the broad U.S. stock market, the broad U.S. bond market, developed foreign stock markets and emerging stock markets. Even within the U.S. stock market, large-company, mid-cap and small-cap stocks all had similar returns. But look more closely, and there was one notable performance difference: Value stocks fared far better than growth stocks.
  • Bonds provided investors with scant protection in 2022’s first quarter. The yield on the benchmark 10-year Treasury note rose to 2.34% 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 began raising short-term interest rates in 2022’s first quarter. One consequence: One-year Treasury bills were yielding 1.57% as of March 31, 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’s first quarter. Oil prices soared to $101 a barrel from $75 at year-end 2021. Gold also jumped, finishing the quarter at $1,942, up from $1,830 three months earlier. But real estate investment trusts slipped in the first quarter as interest rates rose.
  • In March, the Federal Reserve projected that the U.S. economy would grow 2.8% in 2022. What about unemployment? The Fed expects it to finish 2022 at 3.5%, while core inflation runs at 4.1%.
  • 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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