![]() ![]() Dividend stocks took a hit, falling 5.6% as a group, trailing the broader market by a full percentage point.The Morningstar US Market Index has fallen for three consecutive quarters, the kinds of losses not seen since 2008.16, then fell 16.5% from that high by the end of the third quarter. The Morningstar US Market Index rose 14.6% from the end of June through Aug. It was a dramatic round trip for stock market performance in the third quarter.That’s their worst performance through this point in any year since 2002. Stocks hit a new bear market low on the quarter’s final day, down 24.9% so far in 2022. The Morningstar US Market Index lost 4.6% during the third quarter.20, chairman Jerome Powell and the Federal Reserve board signaled more rate hikes ahead for the rest of the year, leading bonds and stocks deep into a selloff that lasted through the final days of the quarter. Bond yields declined amid hopes that inflation had passed its peak and that the Fed could cool its hawkish interest-rate increases.īut a shockingly high inflation reading for August caused worry for investors and Fed officials alike. ![]() A stock market rally that began at the tail end of the second quarter took the Morningstar US Market Index up over 18% from its mid-June bottom. Stock and bond market performance-along with increasingly extreme moves in the currency markets-continued to be driven by the knock-on effects of decades-high inflation, aggressive interest-rate increases by the Federal Reserve and other major central banks, rising risks of recession, and lingering ripples from the pandemic and Russia’s invasion of Ukraine.īy quarter-end, stocks were solidly in bear-market territory, and bond yields-which move in the opposite direction of prices-were at their highest levels in years. In fact, in the third quarter, the performance of a 60/40 portfolio would have been worse than one just invested broadly in stocks, an extremely unusual turn of events. The result is that even investors with portfolios diversified among stocks and bonds-through what is often referred to on Wall Street as the 60/40 portfolio approach-are facing losses approaching 20% this year. ![]()
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