Heading into the last week of August, stocks and bonds are showing their biggest year-to-date declines in at least 50 years.
A team of analysts at Bespoke Investment Group has crunched the numbers and determined that 2022 has so far been the worst year for markets in at least five decades based on an analysis of stock and bond-market returns heading into the final week of August.
One of the reasons why 2022 has been such a difficult year for retail investors is that both bonds and stocks sold off in unison, leaving retirees with a traditional 60-40 portfolio with nowhere to hide.
At least when stocks plunged in 2008 and in 2020, investors had the option of seeking safety in the bond market.
After examining markets’ performance through the first three weeks of August, the Bespoke team found that there have only been three other years where both U.S. stocks and U.S. bonds (including government and corporate debt) were both in the red heading into the final week of August.
Those other years were 1973, 1974 and 1981. Additionally, an index of investment-grade corporate bonds was also in the red at this point in 2008 and 2015, as the Bespoke showed in its data. All the bond indexes cited by Bespoke have data dating back to 1973, while the high-yield bond index only goes back to 1987.