Author: David I. Templeton, CFA, Principal and Portfolio Manager
“A Bear of a Market” and “Nowhere to Hide.” These were a few of the headings from our Investor Letters last year, so along with most investors we are happy to close the book on 2022. Most asset classes generated a negative return last year with it being one of the worst years ever for the classic balanced investment portfolio of 60% stocks and 40% bonds. Despite declines in December, asset classes were largely positive in the 4th quarter as illustrated by the blue bar in the chart below. The rally was also noteworthy because international stocks outperformed U.S. stocks in the final three months of the year after underperforming for some time. As we comment in the Investor Letter, one cannot predict stock market bottoms, but the market pullback in 2022 is creating an environment maybe like 1982, i.e., an opportunity to invest in some good companies at reasonable prices. More of our thoughts on 2022 and expectations for the coming year are discussed in more detail in our Winter 2022 Investor Letter.
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