The numbers are out. The first six months of 2022 have been one of the worst on record for financial assets. When investors receive their quarterly statements and have the courage to read them, they will be shocked, and with good reason. It seems like a sick joke that we went from all-time highs on stocks in January to the most precipitous selloff of all asset categories in a matter of half a year. What happened to diversification, 60/40, bitcoin…? What about all the promises from financial advisers, bankers and money managers? Is it just a matter of what goes up must come down, or something more consequential?
The not-so-funny thing about this selloff is that it is almost entirely caused by the actions of policymakers, globally. To recap – after declaring inflation “transitory”, and printing trillions of dollars, Euros, and Yen, policymakers suddenly went “oops” and now are climbing on the bandwagon of inflation worries that many market participants, economists, and this author have been writing about for years.
The full note on this important topic can be downloaded at this link: LTA Thinking – Self-Inflicted Wounds: Dealing With The Powell Crash