One Chart That Sums Up Stocks in 2022

Chart of the Week: One Chart That Sums Up Stocks in 2021

On the surface, 2021 was a smashing year for investors. Vanguard’s 500 Index fund gained nearly 27% (and that’s without including dividends) with barely a drawdown to speak of—the index fund spent all but two days at or within 5% of an all-time high. Historically, the index fund has dropped 14% or so on average in any calendar year. We’d happily take another year like this one for the U.S. stock market, but we would not count on more of the same in 2022.

2021 stock market drawdowns
Note: Chart shows percentage drawdowns from prior highs in 2021 using daily NAV values from 12/31/20 through 12/31/21 for Vanguard Admiral 500 Index. Source: Morningstar.

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