Third Quarter 2022 Review

The U.S. and global economy are likely headed for a period of below-trend growth, as rising rates and inflation take a bite out of real activity. Below-trend growth is not the same thing as a deep recession, however, and it is important to remember that the stock market’s -20% decline in 2022 could mean a good portion of slowing growth may already be incorporated in current prices.

A key focus now should be ensuring participation in the stock market’s recovery once it takes hold, which will assuredly be before economic data confirms the U.S. economy is in good shape. Shifts in market direction often happen very quickly, which means patience is critical right now. History also tells us that once the stock market has crossed into bear market territory, the next 12-months return for equity investors is almost universally positive.