Bristlecone Blog

Don't get distracted! (...) Small or large crises regularly crop up and cause investors to question the future of the markets.

With these recent unsettling headlines affecting banks, we thought it worthwhile to review and explain what layers of protection are available to your depositors' and investors' accounts.

After falling for most of the year, markets rebounded in the fourth quarter of 2022. Evidence of easing inflation paired with a resilient labor market spurred hopes that the Federal Reserve might slow the pace of monetary tightening, leaving room for a goldilocks "soft landing" scenario—whereby inflation reverts to pre-pandemic levels without triggering a significant recession.

All bear markets are painful, but each has its unique mix of causes, and each is painful for its own reasons. The standout characteristic of the current market is the simultaneous decline in stock and bond prices.

(...) the second quarter of 2022 was challenging for investors. Stocks officially fell into bear-market territory. Bonds sold off, too. Technology stocks and cryptocurrencies crashed, triggering bankruptcies or closures of several crypto lenders and hedge funds.

Financial markets got off to a rocky start in 2022 as inflationary pressures, tightening monetary policy, a Covid resurgence in China, and the outbreak of war in Ukraine led to a selloff in both stock and bond markets. The S&P 500 experienced its first negative quarter since the onset of the pandemic two years ago. Growth stocks were hit especially hard, with the Nasdaq 100 Index declining nearly 20% before recovering to finish the quarter at a 9% deficit. Even bonds were no haven, with the Barclays Aggregate Bond Index falling 6%--its worst quarterly return in almost 40 years (...)