It was a disappointing end to a difficult year as hopes of a Santa rally mitigating some of the damage have vanished. The US stock markets and UK mid cap and small caps look like they might be heading back towards their lows, reinforcing the prior downtrend. It still looks fairly gloomy as we head into 2023.

A modicum of normality has been restored in the UK since Rishi Sunak has been brought in to replace Truss after her chaotic but short-lived reign. Well, at least the markets have been placated a bit, with gilt yields coming back down and the Pound recovering a little. Stock markets had been doing fairly well over the past few weeks, until the Fed poured another load of cold water on any optimism that had started to re-kindle with its latest pronouncements on interest rate hikes.

After a strong rally over the last couple of months, things have come crashing back down to earth over the past week or so. Fears about rising interest rates have come back to the fore and were crystallised in Jay Powell’s comments last Friday, aimed to signal that the Fed will take no prisoners when it comes to tackling inflation.

I’ve neglected the blog since my last quarterly review back near the beginning of April. I’ve had rather a lot on my plate with work and family and haven’t had the time or mental bandwidth to get my thoughts down on paper. This has unfortunately coincided with the unpleasant but fascinating carnage unfolding in economies around the world and in the stock market. This has left my portfolio battered and bloody at the half-way point this year. I should have a bit more free time over the coming months to resume writing here. First I have a bit of catching up to do on my recent trades.

The last few weeks following the immediate aftermath of the Russian invasion of Ukraine have actually been very good for the stock market. My portfolio has had a significant rebound but not enough to rescue my performance from a dismal start to the year – more on that in my upcoming portfolio review.

2022 is turning out to be a pretty unpleasant year for investing in growth stocks. After a dire January, February turned out not to be a whole lot better and March has started off grimly too. Much of this has been driven by the same fears of inflation and impending interest rate rises. However, events have now of course been overtaken by the Russian invasion of Ukraine.

It’s been a difficult start to 2022 for growth-oriented investors. Most growth stocks have been falling since the minutes from the December Fed meeting were released in early January. These took a more hawkish tone than expected and fears of runaway inflation and rising interest rates appear to have taken over.

This is the end of the second year of my copycat portfolio experiment. So far it’s performed well but not outstandingly. Over the past year it returned 25.2%, which compares favourably to the FTSE (11.3%) and S&P 500 (23.1%) and my actual portfolio (21%). Over two years the copycat portfolio has returned 46.9% compared to FTSE (-1.61%) and S&P 500 (45%) and my portfolio (45%).

Stock markets seem to have taken a bit of a fright at news of a new Covid variant and the prospect of lockdowns rearing their ugly heads again. This news has unsurprisingly hammered the sectors most affected ie travel, retail and other cyclical sectors. My portfolio has fared relatively better than the indices in response to this news, though this is coming off the back of a week’s mauling by another short but sharp rotation from growth to value.

October was a decent month and my portfolio managed to claw back some of the fall from the end of September. The market as a whole seems to have recovered some of its mojo and US earnings season has started fairly positively, though I’m not sure how long this will last. The spectre of rising inflation and interest rates still looms in the background.