Last Year Investing Seemed Easy. Not Anymore. – The Wall Street Journal
Sometimes investing seems easy. Not the business of actually making money—that is always hard. But there are times when the market makes it easy to have a strong view and decide where to put money.
Last year was one of those times but, for both bulls and bears, the certainties are gone. Stocks started 2022 overvalued thanks to the overconfidence of the bulls, providing the simplest of signals to the bears. Bonds started last year having willfully ignored runaway inflation and the necessity of the Federal Reserve’s belated reaction. When both bonds and stocks went into a strong (downward) trend, it was easy for traders, too, as markets switched from paying no attention to inflation to focusing on it to the exclusion of all else. Good news on the economy was bad news for stocks and bonds, because it meant more inflation and higher interest rates.