Long-term diversified investing is rooted in the belief that the stock market always moves upward. This method, in contrast to the method used by the short-sighted, assumes that there will be days of decline which will sooner or later be compensated. It’s less likely to predict which days the markets are going to drop a relevant percentage, but he would be an incomparable genius in the market: five of the year’s biggest declines in the S%P 500 should be avoided by investors in 2022 Recorded 95% loss.
According to an analysis by Nicolas Colas, co-founder of Datatrack, two of the five worst days of the US selective are marked with higher-than-expected inflation, the other two due to disappointing business results and the last day when Fed governor Jerome Powell was in office. Stated at the start of the year that it was not considering a rate hike of 75 basis points (May 5, -3.6%).
The worst session for the S&P 500 was on September 13, down 4.3%, when inflation continued to rise and data for the month of August brought the indicator to 8.3%. Something similar happened on June 13, with the May price jump data turning Selective into bearish territory with a loss of 3.9% and a 21.8% decline from January highs.
On May 18, the S&P 500 fell 4% due to poor quarterly results from Target, which underscored poor expectations for consumption in the coming months and weighed down the entire retail sector. Similarly, three weeks ago, on April 29, the index dropped 3.6% due to electronic commerce results.
Of the 250 trading sessions for the US stock market in 2022, 142 ended in the negative. Only in 22 did it exceed a 2% increase, and once did it exceed 3.2%, when it closed on November 10 with a return of 5.54%. In the end, a decline of about 20% for the whole year will go down in history.
Ibex 35 and Eurostox 50
In the annual accumulation, major European stock markets have not suffered as much as the US, despite being more affected by the energy crisis and the war in Ukraine.
The Spanish Selective yields 5% throughout the 258 stock market sessions of the year. Of these, 129 closed in the red, two closed flat and 127 closed with gains. In 11 seasons the save was over 2% and in nine it exceeded that percentage. Three of its five biggest declines occurred within days of the start of Russia’s invasion of Ukraine (March 1, -3.43%; March 3, -3.72%; and March 4, -3.63%). The other two declines above 3% corresponded to those on January 24 (due to rising tensions between Russia and Ukraine) and June 10 (due to fears that the ECB would raise interest rates).
In the index of the continent’s largest companies, the EuroStoxx 50, the story is somewhat worse than in Spain. That leaves it down 11% on the year with 131 negative sessions, a flat, and 125 positive. Its biggest gain was 7.44% on March 9, but it fell more than 3% on seven occasions. As in the Spanish case, March 4 (-4.96%), January 24 (-4.14%) and March 1 (4.04%) stand out. They are followed by February 24 (-3.63%), the day the Russian invasion began, and most recently December 15, where a decline in fixed-income profitability infected European markets.