Q3 2022 was a down quarter for stocks, bonds and real estate, continuing what happened in Q2 2022. US stocks did better than international stocks, and US small company stocks outperformed US large company stocks at -2.19% vs -4.61%.
Interest rates increased. The yield on 5 year US treasury notes is now at 4.06%. Mortgage and other borrowing costs have increased. This does present some opportunity for investors that maintain cash for liquidity purposes as the interest rates paid on CD’s and other cash instruments has also increased.
10 year returns on international and emerging markets stocks are low at 3.62% per year and 1.05% per year. We advise that this not a good reason to divest from these assets in a diversified portfolio. We continue to point out that US large company stocks had negative returns for a full 10 years from 2000 – 2010, followed by a period of exceptionally high returns in US stocks.