The first half of 2022 has been challenging for both stock and bond investors as persistently high inflation, anticipation of further Fed interest rate hikes, and negative GDP growth weighed on returns. The S&P 500 experienced its worst first half of the year since 1970, while bonds have experienced a loss of more than 10%.
Alternative investments, as we define them, include funds that focus on more esoteric strategies such as investments in catastrophe bonds, small private loans, currencies, commodities, private real estate, and may involve reasonable shorting or leverage. These are all things that sound risky.
The first quarter of 2022 was a challenging start to the New Year for investors. After falling into correction territory, the S&P 500 cut some of its losses late in the quarter to end the period down 4.6%. This marked the first time the index experienced a negative quarter since Q1 of 2020.
None of us thought we would live long enough to see our group of alternative investments reverse their multi-year slump, but it is finally happening. Our alternative investment portfolio has outperformed stocks and bonds so far this year and over the past twelve months.