Q3 2022 Client Letter

The quarter in brief:

                                                                                                             2nd Quarter    Year to Date

Dow Jones Industrial Average                                                                - 3.36%             -17.45%

S&P 500                                                                                                   - 2.78%             -21.57%     

I Shares Broad USD Investment Grade Corp Bond ETF                       - 5.39%             -19.6%

            Note: values as of 09/30/2022 (1)(2)

I don’t have to tell you that this is the third quarter in a row this year with negative returns across the board.  

Are we in a recession? Maybe…maybe not… maybe next year… does it matter?  We continue to have a strong labor market with low unemployment and continued corporate earnings growth but with the Federal Reserve continuing to raise interest rates to tame inflation our economy may continue to contract. 

As I said in a recent email “recessions are normal, natural and necessary”. Since 1950 there have been 11 recessions lasting between 2 and 18 months with the net economic impact in the expansion after the recession far exceeding the losses during the recession. (3) 

Does that mean you shouldn’t be worried when you see negative numbers? Of course not. But, it also doesn’t mean you should sell when you see negative numbers. Instead call us. 

We will want to make sure your portfolio is well positioned to take advantage of and/or protect it from any long term impact that this year’s negative returns may have.