Yearend Review 2022

Yearend Review for 2022

2022 is in the books. It was a memorable one for investors!

Today I’ll go over some of our most viewed posts in our yearend review for 2022.

It’s always fun to look back. This year was all about the macro: rising rates, soaring commodity prices, war, oversold conditions, a strong dollar, lower valuations and more. Value sectors dominated in performance and our data.

MAPsignals put out a lot of great research to help navigate the challenging tides. We tackled many worries on investors’ minds and provided data-driven angles.

While we weren’t perfect, I can say that we did a respectable job in terms of performance and historical studies. I’m sure you’d agree there was a lot to cover in 2022!

Let’s now take a quick lap down memory lane at some of the bigger themes from this year.

Yearend Review for 2022

Without question, positioning and macro events dominated portfolios in 2022. Below are 14 of our most memorable insights from January through December.

Grab a coffee. I made a quick recap of each highlighted blog piece. Enjoy!

  1. In January, Alec Young kicked off an enlightening piece titled, Don’t Fear the Fed, where he showed how stocks performed historically given the pace of rate hikes.Fed Rate Hikes & Stocks - S&P 500 in Years 1 & 2 after 1st Rate Hike; '46-'21 | MAPsignals
  2. Later that month, he asked a simple question: Which sectors perform well when rates rise? Energy, Financials, & Industrials fared the best. Notably, the energy group ranked highest all year in our data.2-yr monthly Stock Sector Correlations to 10 Yr. Treasury Yield | MAPsignals
  3. Then in February, Alec reminded us of the power of dividends in a long-term portfolio. Reinvesting dividends since 1994 resulted in 70% more money compared to total return alone. Yes, dividends make a big difference:Growth Returns of $100 invested in S&P 500 with & without Dividends | MAPsignals
  4. Next, in March I made the case that investors shouldn’t fear recessions. While sectors were under pressure, like Technology, history shows that years following a recession are green on average since 1980:History shows that years following recessions are green on average since 1980 | MAPsignals
  5. Then in May, the Big Money Index reached oversold conditions. All sectors except for energy were sold hard, indicating a reversion bounce should come soon:Big Buying & Selling by Market Cap MAY 9-13, 2022 | MAPsignals
  6. Fast forward to July and market internals were improving, setting the stage for a rally. Health Care, Financials, & Industrial stocks were under heavy accumulation:Big Money Index breaks 3-month high as selling dwindles & buyers step in | MAPsignals
  7. Then in August our BMI reached overbought conditions (80%) for the first time since December 2020. That prefaced the signal to take profits once it fell below 75%:Overbought BMI Falling Below 75 Spells Trouble For Stocks | MAPsignals
  8. August was a busy month as I laid out our midterm election playbook. Since 1990 in midterm election years, expect weak Septembers and strong Octobers & Novembers:S&P 500 Monthly Returns During Midterm Election Years 1990-2022 | MAPsignals
  9. Then came September when the case was made to prepare for September volatility. The BMI broke below 75% and reached oversold that month:Big Money Index Reaches first overbought reading in 2022 - Expect bumpy September | MAPsignals
  10. Now on to October when many were worried over the dollar’s rise. Alec researched how stocks fare after the dollar peaks. Discretionary, Financials, and Health Care stocks jump the most 12 months post the dollar peaking:Average 12M Forward Returns after dollar peaks | MAPsignals
  11. Later that month a rare bullish signal triggered. Our data saw the weakest breadth reading since April of 2020. The forward 12- and 24-month returns post this signal have been green in all instances since 2012:Forward Returns post 5-week buy average greater than 8.5 percent | MAPsignals
  12. In November, I laid out our post midterm election stock market gameplan. Stocks and the BMI tend to rise in December and January. I made the case that we could be looking at large rally into the year end. Unfortunately, that part of the roadmap didn’t go as planned. However, November – April in post midterm election years have been green in every instance since 1982:S&P 500 Midterm Election Returns 1980-Present | MAPsignals
  13. Later in November I posted our Big Money Review for 2022. Even in one of the toughest bear markets in recent memory, MAPsignals top stocks beat the S&P 500 handily. Of the 88 stocks profiled, they averaged a +6% performance vs -2.6% for the market. I’m proud of that!MAP Top 20 Performance 2022 | MAPsignals
  14. Lastly to round out 2022, Alec laid his macro outlook for 2023: Why stocks can be a good bet. He covered recession fears, inflation worries, the earnings apocalypse, and valuations in this awesome piece. As we head into a new year, keep in mind that recessions aren’t the end of the world.

Six months prior to a recession, stocks fare the worst with an average loss of -4.6%. In the six-month period after a recession, the S&P 500 vaults an average of 16.9%. That’s something to look forward to:

S&P 500 Recession Performance 1926-Present | MAPsignals

And that’s a great way to close the books on this unforgettable year – on a high note!

Here’s the bottom line: 2022 has come to a close. And I’m sure many are glad it’s over!

Investors witnessed plenty of tough conditions from a macro standpoint: high rates, elevated energy costs, wars, a strong dollar, and a bear market to name a few. Our Big Money Index reached oversold an incredible 4 times.

Even still, we found plenty of leading stocks and sectors for subscribers. While no one bats 1000, we look for opportunity in any market. We keep it simple: Just follow the flow the money.

Our goal at MAPsignals is to provide a lens into where Big Money Investors are placing their bets and educate you along the way. Understanding positioning and the macro factors that drive stock prices is a great edge in any environment. Our portal brings you that info daily each morning.

My bet is 2023 will bring better returns and more positivity than you expect.

Here’s to wishing you and your family a great holiday season.

Happy New Year from the MAPsignals family.

Give our research a try for 2023, sign up here.