March Student of the Market
This presentation covers multiple topics such as:
- Historic Geopolitical Events
- January and February Returns
- Stock Market Volatility
- Win More by Losing Less
- Value Versus Growth
- Small Cap Stocks
- Bond Market Returns
January and February Returns
The start of 2022 is within the top ten worst starts of the year for stocks. The four starts that are worse than 2022 are 2019 with -18.1%, 1933 with -17.0%, 2008 with -9.1%, and 2020 with -8.3%. These returns are for the first two months of each year. Even though the start of 2022 is the fifth worst start, these historic worst starts have mostly seen positive returns for the following 10 months. For instance, the next ten months in 2009 had a return of 54.6%, in 1933 a return of 85.6%, in 2008 a return of -30.7%, and in 2020 a return of 29.1%.
Stock Market Volatility
Volatility is shown to be picking up in 2022. As of 2/28/22, 2022 had 4 days of stock market returns +/-2% or more. In comparison, 2020 had 44 of these days and 2021 had 7 of these days. Since 1/1/01, there have been three years with no days of stock market returns +/-2% or more. These include 2004, 2005, and 2017. There were 680 days without a 2% trading day from 10/02/03 to 6/14/06 and 310 days without a 2% trading day from 11/08/16 to 2/01/18.
Value Versus Growth
2022 is the second-best year of value outperformance in comparison to growth for the first two months. The large value minus the large growth performance for January and February of 1993 was 9.2 and the large value minus the large growth performance for January and February of 2022 has been 9.0.
Bond Market Returns
The start of 2022 has been the 2nd worst start of a year ever for bonds. The total return for the first two months of the calendar year for 1980 was -8.8% and for 2022 was -3.3%. On average following the worst starts, the next 10 months saw bonds returns bounce back.
If you are interested in learning more, please click on the link to the BlackRock Student of the Market presentation below.