Independent Banker - December 2022 - 32

PORTFOLIO PORTFOLIO MANAGEMENT
Historic sell-off
This year's market rout takes us back decades.
By Jim Reber, ICBA Securities
H
oliday greetings! Let's add to the
spirit of the season by discussing
the people's choice for the conversation
of the year: interest rates.
And this isn't just any old rate
discussion. We're talking constant,
may-be-getting-worse, haven't-seenthis-in-my-career-type
dialogue.
Heck, you know this has gone
mainstream when the person who
cuts my hair knows who Jay Powell is.
Multiple surveys have pegged inflation
as the number one issue among voters
during this election year.
Given all that's gone on in the
economy this year, let's put a pencil
to just what the aggressive tightening
by the Fed has produced, both good
and bad. Maybe, just maybe, a year
from now we can talk about how an
efficient market, such as our bond
market, will both taketh and giveth,
as long as we examine a sufficiently
broad time frame.
Bellwether year?
The financial markets this year
aren't evoking the feel-good holiday
classics we're used to hearing in
December. It's more like Martha and
the Vandellas' " Nowhere to Run " from
1965. The benchmark for tracking
the bond market is the old Lehman
Aggregate Bond Index, which is now
known as the " Bloomberg Agg " in
many circles. The index has some
application to community bank bond
portfolios. For example, it includes
a number of sectors that banks own,
such as treasuries, agencies and
mortgage-backed securities (MBS).
It's not a perfect template, as there
are more corporates and no tax-free
munis in the index, but it's still the
best known, most visible and deepest
bond index available.
Through 11 months of 2022, the
Bloomberg Agg is down about 16% on
a total return basis. This is by far the
worst year since at least 1990. In fact,
28 Q ICBA Independent Banker Q December 2022
Photo by pogonici/Adobe

Independent Banker - December 2022

Table of Contents for the Digital Edition of Independent Banker - December 2022

Table of Contents
Independent Banker - December 2022 - Cover1
Independent Banker - December 2022 - Cover2
Independent Banker - December 2022 - Table of Contents
Independent Banker - December 2022 - 2
Independent Banker - December 2022 - 3
Independent Banker - December 2022 - 4
Independent Banker - December 2022 - 5
Independent Banker - December 2022 - 6
Independent Banker - December 2022 - 7
Independent Banker - December 2022 - 8
Independent Banker - December 2022 - 9
Independent Banker - December 2022 - 10
Independent Banker - December 2022 - 11
Independent Banker - December 2022 - 12
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Independent Banker - December 2022 - 15
Independent Banker - December 2022 - 16
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Independent Banker - December 2022 - 19
Independent Banker - December 2022 - 20
Independent Banker - December 2022 - 21
Independent Banker - December 2022 - 22
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Independent Banker - December 2022 - 24
Independent Banker - December 2022 - 25
Independent Banker - December 2022 - 26
Independent Banker - December 2022 - 27
Independent Banker - December 2022 - 28
Independent Banker - December 2022 - 29
Independent Banker - December 2022 - 30
Independent Banker - December 2022 - 31
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Independent Banker - December 2022 - 33
Independent Banker - December 2022 - 34
Independent Banker - December 2022 - 35
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Independent Banker - December 2022 - 37
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Independent Banker - December 2022 - 40
Independent Banker - December 2022 - 41
Independent Banker - December 2022 - 42
Independent Banker - December 2022 - 43
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Independent Banker - December 2022 - 45
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Independent Banker - December 2022 - 47
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Independent Banker - December 2022 - 49
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Independent Banker - December 2022 - 65
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Independent Banker - December 2022 - 67
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Independent Banker - December 2022 - Cover3
Independent Banker - December 2022 - Cover4
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