Why aren’t stocks going down? The near-term landscape is full of obvious risks and precarity. Shouldn’t the market reflect the dark horizons? Sometimes, the market goes up because of good news. Sometimes, it goes up because the bad news is no worse than what investors already expected.

With a year as dismal as 2022, it’s natural to want to assign blame: inflation, the Fed, war, etc. The best and simplest answer may also be the least dramatic and fulfilling – markets fell a lot because they went up too much in the first place.

While it’s been forty years, we have seen this movie before. No one knows whether we are in the early, middle, or late innings of this inflation story. What we do know is that the Fed is enacting a cure that has been effective. Like last time, investors must endure pain while we wait for the cure to work.

Apollo is matchless at weaving together data, anecdotes, and behavioral biases to educate investors on how to make sound, evidence-based decisions. His lessons are evergreen, but they are especially important to recognize in the face of harrowing markets, like we see today.

It was the worst three month stretch for bonds since 1980. The Bloomberg Barclays Aggregate bond index fell 6%. The index yields about 2.5%, meaning it lost over two years of expected income in a quarter. Add in high inflation, and bonds had a dismal start to the year.