2022 In Review: What Happened?

January 18, 2023

At the risk of stating the obvious, last year was rough!  2022 was the worst year for equities since the financial crisis in 2008 as the fraying economy led to losses across the board.  The S&P 500 index closed down -18.1% after trading nearly -24% lower by October. Internationally, developed markets were a bit stronger with the MSCI EAFE index trading down -14.5%.  Coming off historically low levels, interest rates spiked to levels not seen in the past decade.  The US 10 Year Treasury rate moved from 1.5% to 4.25% in October, eventually ending the year at 3.9%.  This led the Bloomberg US Aggregate bond index to trade down -13%, by far its worst year ever.  Inflation rose dramatically to levels not seen since the 1970-80s - topping out at just over 9% in June - which had the Fed rethinking past policies.  The US Dollar was very strong, which can yield mixed results depending on the industry (i.e., the tech sector was hit hard by the move).  Energy thrived in this rattled market which left consumers feeling the pinch at the gas pump.  Other usually non-correlated assets also struggled.  While Gold eventually closed almost unchanged on the year, it experienced an over 20% decline from March to November. 

This year the US, as with many other parts of the world, continued its supply chain struggles.  This had an outsized impact on certain industries, such as auto manufacturing.  We’ve also seen dramatic downfalls in commercial real estate. Both are lingering effects of the Covid-19 pandemic. Production is still regaining speed and remote work has become the norm. Additionally, the conflict between Ukraine and Russia deepened the aforementioned supply chain wounds and aggravated already high inflation.

Inflation may be fueled in part by a tight labor market because unemployment rates have steadily decreased in the last year. Unfortunately, high inflation and low unemployment are two key ingredients to the recession recipe. In late August, Federal Reserve Chair, Jerome Powell reported that interest rates were to remain high in order to combat inflation.1 This was another blow to the market as consumers feared higher borrowing costs

Various pundits have predicted that a recession will hit in 20232, but the severity and the duration of the recession are still up for debate. Experts are still wondering how long it will take to see a full recovery from the Covid-19 pandemic (if we will ever see a full recovery.) And the conflict between Russia and Ukraine will hopefully come to a resolution. For the most part, prognosticators expect to see more turbulence and earnings decline this year.

What does this mean?

Investment performance was rough no matter where one looked with very few places to hide.  However, 2022 may just end up being a hiccup.  For those investors with a long-term investment horizon, the short-term effect of a down market one year does not necessarily break a longer-term plan.  But those investors with a shorter-term view, such as those nearing retirement, 2022 was perhaps more detrimental. 

Taking age out of the equation, an investor’s risk tolerance – whether ability to take risk or appetite to take risk – may lead to a varying viewpoint on the past year.  For someone with a higher risk tolerance, 2022 may just look like a bump on the road.  It could also look like a buying opportunity, getting in on low prices!  But for someone with a lower risk tolerance, it may cause more apprehension.

Unfortunately, many retirement investors are left to fend for themselves when it comes on deciding how to invest and when to make changes.  Some can capably handle the turbulence of the past year, while others are left wondering what to do.  One solution the market has afforded investors are Target Date Funds (TDF), which automatically puts an investor in a diversified portfolio based on their age.  While this may be a better solution for some than doing it themselves, it may not prove to be the best solution.  These TDFs do take age into account when selecting a portfolio, but what they fail to do is take the investors risk tolerance (ability and appetite) into account.  For example, for two investors that are the same age and plan to retire at the same time, a TDF would put them into the same portfolio.  However, each investor could have drastically different circumstances which would affect how they are allocated.  These circumstances could be more objective in nature, such as salary difference, different balances, etc.  They could also be subjective in nature, which leads to the risk appetite part of the equation.  If these clients had professional help, these allocation decisions could be directed by that professional.  However, many investors are not afforded such luxury, yet they should still be able to have a similar experience. 

At Stadion, we believe a personalized approach to retirement investing is important and can guide customers to better retirement outcomes.3 That’s why we offer a managed account service within retirement plans (i.e., 401k accounts) designed to help participants achieve their retirement goals. Our team of investment professionals monitor each account on a daily basis and base investment decisions on a disciplined process, not emotions. Our personalized approach is designed to consider information about each client – their feelings about risk, current age, expected retirement date and other personal factors – and support their journey towards their retirement goals.


Clayton Fresk, CFA
Portfolio Manager, Investment Committee member

Hazel Allen
Portfolio Management Analyst


3Alight, “Managed accounts: A personalized employee benefit for retirement and financial wellbeing”, 2022.

The S&P 500 Index is the Standard & Poor’s Composite Index of 500 stocks and is a widely recognized, unmanaged index of common stock prices.

The MSCI EAFE Index (Europe, Australasia, Far East) is an unmanaged free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada.

The 10-year Treasury note is a debt obligation issued by the United States government with a maturity of 10 years upon initial issuance. A 10-year Treasury note pays interest at a fixed rate once every six months and pays the face value to the holder at maturity.

The Bloomberg U.S. Aggregate Bond Index is a market capitalization-weighted index, meaning the securities in the index are weighted according to the market size of each bond type. Most U.S. traded investment grade bonds are represented.

The financial crisis of 2008, or Global Financial Crisis, was a severe worldwide economic crisis that occurred in the early 21st century.

There are certain limitations to technical analysis research, such as the calculation results being impacted by changes in security price during periods of market volatility. Technical measurements are one of many indicators that may be used to analyze market data for investing purposes and should not be considered a guaranteed prediction of market activity.

The Reports’ commentary, analysis, opinions, advice, and recommendations represent those of Stadion Money Management and are subject to change at any time without notice. The opinions referenced are as of the date of publication and are subject to change to due changes in the market or economic conditions and may not necessarily come to pass Stadion reserves the right to modify its current investment strategies based on changing market dynamics or client needs. This document may contain certain information that constitutes “forward-looking statements” which can be identified by the use of forward-looking terminology such as “may,” “expect,” “will,” “hope,” “forecast,” “intend,” “target,” “believe,” and/or comparable terminology. No assurance, representation, or warranty is made by any person that any of Stadion’s assumptions, expectations, objectives, and/or goals will be achieved. There is no guarantee of the future performance of any Stadion portfolio. This material is for information use only and should not be considered financial advice. The data presented has been gathered from sources believed to be reliable; however, their accuracy, completeness, or reliability cannot be guaranteed. We make no warranties and bear no liability for your use of this information.

Diversification does not eliminate the risk of experiencing investment losses.

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