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Perspectives Newsletter: Q2, 2022
What began as a market wobble in the first quarter turned into a full rout and bear market in the second as the S&P 500 dropped by more than 15% in a quarter for just the ninth time since the end of World War II. There was seemingly no investable asset class immune to the weakness as equities across the globe were hit hard, bonds posted another quarter of negative returns, crypto plunged and even many commodities pulled back as recession fears took hold. The second quarter also saw 90% of the trading days post an intraday move of at least 1% in the S&P 500, the most volatile reading since 2009. At the root of much of the weakness was inflation that continued to march higher, and the fear that in an effort to tamp out inflation the Fed would push the US into recession. With inflation running hot and central banks around the globe tightening in response, the more speculative areas of the market were hit hardest. Growth stocks witnessed a bear market just in the second quarter; when combined with losses from the first three months of the year, the index has a negative return of nearly -30% at the midpoint of 2022. Value stocks were relative stars by comparison, falling just -12% in the quarter and about -13% for the year. Small and midcap stocks also lagged their larger peers but nowhere was the damage as severe as in the crypto space. Long touted as a safe haven or inflation hedge, it proved to be neither as crypto currencies were trounced in the quarter. The flagship Bitcoin lost over half its value.Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Parsons Capital Management, Inc.), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Parsons Capital Management, Inc. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Parsons Capital Management, Inc. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. If you are a Parsons Capital Management, Inc. client, please remember to contact Parsons Capital Management, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing, evaluating, and/or revising our previous recommendations and/or services. A copy of the Parsons Capital Management, Inc.'s current brochure discussing our advisory services and fees is available upon request.
