A Wealth of Common Sense: 9 Things That Surprised Me In 2022

With the trading year now over, investors can take a look back at some of the big moves that occurred. Every year will always bring some surprises to the market. But 2022 saw a mix of conditions that led to several big surprises.

That largely starts with the double-digit drop in the stock market. Investors can expect a down year every 3-4 years historically. That’s on top of bear markets, which can often occur and disappear within the span of a calendar year.

The big issue with 2022 wasn’t just the declining stock market, but the big drop in the bond market as well.

Rapidly-rising interest rates led to a quick and massive repricing of bonds. And in order for bond yields to move higher in line with interest rates, prices have to drop.

The past year also saw mortgage rates nearly double. Some rise was expected, as 2021 saw high inflation and historically low rates.

The 30-year fixed rate mortgage moved from under 3 percent at the start of the year to over 7 percent. And it will likely climb higher as rates to too

In the meantime, government bond yields rose substantially. But compared to inflation, they didn’t perform that well. The high inflation of the 1970s and 1980s saw a big spike in bond yields to result in real yields adjusted for inflation. That hasn’t happened yet with government bonds.

To read the full list of 2022’s surprises, click here.