There have been just 3 occasions upon which the S&P 500® index experienced an annual return worse than 2022’s nearly 20% decline (1974, 2002, 2008). Each of those years saw significant rallies over the year that followed (1975, 31.5%; 2003, 26.4%; and 2009, 23.5%). Moreover, S&P 500 returns are positive approximately 80% of the time in the full year following any down year.
The Federal Reserve (Fed) has slowed the pace of the Fed Funds hikes, but the tightening cycle has yet to reach its climax and the risk of a Fed-induced recession continues to rise.
Inflation has cooled, but with the Fed looking to achieve and maintain a restrictive environment, it is likely that markets will continue to experience above-average volatility.
Presently, Thrivent retains a small equity bias relative to fixed income.