Why Your Money is Like a Bar of Soap
It’s been a tough 12-month stretch for financial markets. The S&P 500 (an index of the 500 largest companies in America) was down nearly 20% in 2022 - its worst year since 2008. By many measures, bonds had their worst year ever, recording double-digit losses. Bellwether stocks that carried the market for the past several years had it far worse. On a combined basis, Apple, Microsoft, Alphabet (Google), Tesla, Meta (Facebook), Amazon, and Netflix were down nearly 50%. Many popular “Covid stocks,” like Peloton and Zoom, are down over 90% from their peaks. Some investors in the riskiest corners of the market (like cryptocurrencies) were wiped out altogether. Yes, 2022 was a rude awakening. And while there was little place to hide, those who followed old lessons of diversification and risk management likely avoided life-altering losses.