AllianceBernstein Holding LP
01/26/2022 | Press release | Distributed by Public on 01/27/2022 14:07
Equity Market Correction Opens Door for Quality Recovery
It's been a challenging start to the year for equity investors, with markets dragged down by a sell-off starting in expensive technology stocks, particularly in the US. While the correction is unsettling, we think it may open the door for a healthier recovery in which companies with high-quality, sustainable businesses can stand out.
After setting new records at the end of 2021, the S&P 500 declined by 8.7% through January 26. The tech-heavy Nasdaq tumbled by 13.4%. European and Japanese stocks dropped more modestly, while emerging-market equities were relatively resilient, falling 1.6% in US-dollar terms. Value stocks have performed better than growth stocks in the US and globally. The MSCI World Value Index was down 2.4% through January 26 in local-currency terms, versus a 12.9% decline for the MSCI World Growth Index.
Sharp and sudden market declines are always disturbing and may make investors question equity allocations. But corrections are quite common, and in most calendar years, the S&P 500 posted positive returns even when the market suffered a sharp intra-year decline (Display). When volatility strikes, it's important to understand what's driving the uncertainty, and how we can position to best capture the recovery potential when the dust settles.
After setting new records at the end of 2021, the S&P 500 declined by 8.7% through January 26. The tech-heavy Nasdaq tumbled by 13.4%. European and Japanese stocks dropped more modestly, while emerging-market equities were relatively resilient, falling 1.6% in US-dollar terms. Value stocks have performed better than growth stocks in the US and globally. The MSCI World Value Index was down 2.4% through January 26 in local-currency terms, versus a 12.9% decline for the MSCI World Growth Index.
Sharp and sudden market declines are always disturbing and may make investors question equity allocations. But corrections are quite common, and in most calendar years, the S&P 500 posted positive returns even when the market suffered a sharp intra-year decline (Display). When volatility strikes, it's important to understand what's driving the uncertainty, and how we can position to best capture the recovery potential when the dust settles.