The third quarter was a very volatile period for financial markets with an astonishingly wide set of declines across all the major asset classes. Indeed, after a dismal first half of the year, the vast majority of asset classes recorded a negative performance during Q3.
This “everything down” market weighed on multi-asset portfolios, with limited hiding places across the range of investable asset classes. For context, looking at US data back to 1928, there have been only 5 calendar years when equities (S&P 500) and bonds (10-year US Treasury Bonds) have fallen together. 2022 is the only year in this period when both are down more than 10% each.
We still have a couple of months left in the year for this trend to be reversed but highlights the unprecedented times that we are currently experiencing in markets. That said, nothing lasts forever and we must remember that markets are forward forecasting mechanisms and often only need to see the light at the end of the tunnel to change their direction.
