Elevated inflation and rising interest rates commanded much of the attention in 2022, with proclamations from Jerome H. Powell and his colleagues at the Federal Reserve often the catalyst for volatile gyrations in the prices of stocks. Of course, those moves were generally in the southern direction over the first three quarters of the year, as the S&P 500 entered into Bear Market territory in June before hitting its low for the year on October 12.
There were no awards for the losses on Value stocks over those nine months, but inexpensive equities held up much better. The Russell 3000 Value index suffered a return of negative 18.0% while its Growth counterpart skidded 30.6%, which is in keeping with the historical evidence for Value outperformance when inflation is high, when the Fed is tightening and when interest rates are moving up.
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