Ever since the COVID crash, the market has been hotter than ever, with firms and portfolios making crazy money. Even with the pandemic raging on, social unrest high with the murder of George Floyd, and an administration change in the United States, the S&P 500 has almost doubled itself from the pandemic low, hitting fresh record highs every month.
The real economic problems are starting to show, and it’s safe to say that 2022 has had a very rough start. Inflation has now hit a 40-year high due to supply chain bottlenecks, and the volatility of the energy market has added to this. More importantly, the Russian invasion of Ukraine, an event that has caused the most havoc in Europe since World War II, has been a big negative. This has added more to the pot that has been unsettling the markets, and many felt this was overdue as the markets ran wild and became a bit bubbly.
All of this has led to the worst quarter in 2 years for the stock market with the S&P 500 down 4.9%, which breaks the streak of 7 straight quarters of growth. Thursday was especially bad, with the indices falling by 1.5%. This has led to the government attempting to prop up the markets, with the Federal Reserve raising interest rates, so we’ll see the effects of that in the coming quarters. The NASDAQ is not doing any better, down 9 percent this quarter, and some of the biggest tech names have taken large hits. Netflix and PayPal are both down more than 40 percent from all-time highs, and Meta Platforms shed nearly 50 percent of its share price. Overall, things could get more volatile with an ongoing war and upcoming elections, so buckle in.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.