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In 2022, investors faced one of the most difficult markets in decades as the Federal Reserve’s efforts to combat the worst inflation since the 1970’s sent stocks and bonds reeling.

Just how bad was it? 

Jim Reid, head of thematic research at Deutsche Bank, shows in the chart below that 2022 experienced the worst combined total return for both stocks and bonds at least back to 1872, as far back as comparable records reach.

As both stocks and bonds fell, the much-heralded portfolio of 60% equities and 40% bonds dropped almost 20%, the worst return for this type of portfolio since 1930.

In case you were curious… gold in 2022 was down -0.8% and since 2001 has a CAGR (compound annual growth rate) of 8.3%. The S&P since 2001 is 4.7% and the 60/40 comes in at 4.6%.

(Chart from Deutsche Bank)

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