Premium Market Analysis, Trader Education, Software, and Trading Strategies

Market Statistics

2022 in Review: A Year of Capital Destruction

Photo by Burak The Weekender.

The predominant market theme in 2022 was “capital destruction”. Stocks plunged, bonds crashed, and commodities and the US dollar gave back a good fraction of their gains in the second half of the year.

Relative Performance of 9 Asset ETFs in 2022

Commodities (DBC and USO) peaked in early June and then gave back a good fraction of their gains.

The US dollar (UUP) peaked in mid-September and then retreated. Gold (GLD) bottomed around the same time but finished the year in the red.

Stocks (SPY, VEU, and EEM) had a few failed relief rallies and ended the year with significant losses.

Bonds (TLT) crashed but since mid-October have managed to stage a small rebound.

Returns, Drawdown, and Volatility in 2022

Bonds (TLT) and Emerging Markets (EEM) had the largest drawdown in 2022, -39.1% and 33.6%, respectively.

Crude oil (USO) and Commodities (DBC) had the highest volatility at 42.5% and 26.2%, respectively.

Passive and 60/40 investors had large losses in 2022. CTAs had excellent performance but since November have given back gains due to reversals in commodities and bonds.

All in all, for most market participants, 2022 was a year of capital destruction.


Subscribe for free notifications of new posts and updates from the Price Action Lab Blog and get the PDF book “Profitability and Systematic Trading” (Wiley, 2008) free of charge.

Disclaimer:  No part of the analysis in this blog constitutes a trade recommendation. The past performance of any trading system or methodology is not necessarily indicative of future results. Read the full disclaimer here.

Charting and backtesting program: Amibroker. Data provider: Norgate Data