GPM Aspire ETF Portfolios - Fourth Quarter (Q4) 2022 Summary
- Stocks ended Q4 mostly higher, snapping a three-quarter losing streak; posted big gains in October and November before a pullback in December after the Fed hiked rates.
- Bond returns were positive in Q4, following three-straight down quarters. High-yield and corporate bond gains were robust, with Treasuries much less so. 2022 stands as the worst year on record for fixed income markets.
- Stock ETF portfolios gained with the broad market in Q4.
- Year-end tax-loss selling was extraordinarily heavy, slamming some high-quality stocks to oversold levels to start 2023.
- We believe this bear market created excellent opportunities for longer term investors like GPM.
- GPM balanced portfolios performed well in Q4 with gains in stocks and bonds.
Brief Markets Recap
Bear market sentiment tried to turn in Q4. Early signs of increased willingness to take risk were squelched with a 50-basis point rate hike and hawkish comments from Jay Powell on December-14. Stocks quickly surrendered about one-third of the hefty gains from October lows, but still ended the quarter mostly higher. With most stocks in the red for the year and negative sentiment still pervasive, year-end tax loss selling volume seemed extraordinarily high as many investors gave up in the final weeks of the year. Aggressive tax motivated selling of high-quality growth companies during a buyer’s moratorium resulted in unusually large price declines. The tax calendar is out of the selling equation now. All sectors except energy and about 80% of stocks declined for the year.