An inauspicious start to the new year for markets as the Fed's increasing hawkish created losses in equity and bond markets alike. With inflation worldwide continuing to exceed expectations, central banks are looking to quickly unwind monetary stimulus in their respective jurisdictions. This stimulus has to some extent driven up asset prices across the board in 2020, so it's unsurprising to see this unwind heading into 2022.

Beyond the surface a particular amount of pain was reserved for speculative mid-cap tech, and other growth stocks, typified by the return on the NASDAQ 100 index (-8.7%). Safe havens were few and far between, with traditional bond indices falling around -1.3%.

Refuge was to be found in "Value" strategies, which focus on buying beaten up stocks on low P/E multiples.

Despite the turmoil we remain constructive on equities for the rest of the year, and see this episode as merely a 'taking out of the trash'. With valuations remaining compelling, and economic recovery likely to pick up once again as COVID turns from pandemic to endemic, we forecast volatile yet fruitful conditions for equity investors.