US stocks, as measured by the S&P 500 index, reached an all-time high in late December of 2021. From
there, a confluence of risks and realities has sent stocks into a slide that may be referred to as a “bear
market” (a 20% or greater correction). What has been uniquely painful in 2022 has been the
simultaneous decline in bonds, which lost more than 10% during the first half of 2022.1 Higher quality
bonds typically offer some respite to a balanced portfolio during periods of equity market stress, but
the catalysts for the decline in 2022 challenged this historical relationship. As a result, a typical “60/40”
portfolio of 60% S&P 500 and 40% Barclays Aggregate Bond Index declined more than 16% in the first
half of 2022.