Finding your anchor
by Stephen Nguyen, CFA
— Debt is a great way to ruin a good investment.
What a difference a few months make. After a relatively calm year in 2021, we have witnessed several asset classes posting significant losses in the first half of 2022, including equities, credit, and sovereign bonds. We have seen an increase in volatility, and traditional diversifiers like government bonds have failed to provide protection as their correlation with risky assets has risen. The increase in correlation between bonds and equities has caused major headaches for the traditional multi-asset investors.
- Global equities rose 3.6% last week
- The Federal Reserve Systems’ fourth rate hike this year raised interest rates by 75bps to 2.5%, as forecast
- Brent crude rose 6.6% over the week to $110.01 a barrel
- Gold rose 2.2% to $1765.94 per ounce