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2022 Year-in-Review: Wall Street’s Worst Year Since 2008

2022 was a year of significant change. It marked the end of an era of low rates and easy-money policies that had fueled an unprecedented bull market in equities. In a bull market, it’s easy to look like a great investor because a rising tide lifts all boats. Only during challenging times is the truth revealed.

During the year, a perfect storm of factors bombarded the markets all at once. Inflation ran rampant at levels not seen since 1982. In response, the Federal Reserve raised interest rates to the highest they’ve been in 15 years, which battered equities. At the same time, geopolitical tensions and volatile economic data abroad further exacerbated the negative sentiment.

The importance of having proper portfolio and risk management protocols was more apparent than ever. Passive, long-only investors, as well as those who were over-indexed on risky assets, suffered significant losses. For the year, the Dow fell 8.8%, the S&P 500 lost 19.4%, and the Nasdaq declined by 33.1%.

At alphaAI, we strive to deliver better risk-adjusted returns than traditional buy-and-hold strategies. By automating key portfolio management functions, we help our clients achieve higher returns and lower losses.

Although 2022 was a year marked by fear, our clients were worrying less. All of our core strategies significantly outperformed the S&P 500 on a risk-adjusted basis. On average, our clients outperformed the market by more than 5% on a net basis with 30% less volatility, resulting in Sharpe Ratios that were more than 50% better than that of the S&P 500.

Looking forward, we expect more pain in 2023 before a potential rebound in the latter half of the year. If you are invested in equities, it’s more important now than ever to have proper risk management protocols and portfolio positioning in place.

We offer a wide variety of risk-managed strategies built for every type of investor. Choose the best strategy for you based on your risk tolerance, financial goals, and investment preferences. From conservative to aggressive options, we have a strategy that will fit your needs. Learn more here

alphaAI Highlights

  • All of our core strategies significantly outperformed the S&P 500

  • We launched four new Tactical Long-Short strategies in 2022

  • In 2023, we are launching two new Absolute Return strategies, among many others

Since inception, all of our core strategies have outperformed the S&P 500 on a risk-adjusted basis. We have been able to beat the market primarily through adaptive risk management. In other words, we use automation to adjust risk levels in response to market conditions. When conditions are uncertain, risk is reduced in order to minimize losses. When conditions are more favorable, risk is increased to enhance gains. Doing so enables us to outperform the market with lower volatility than would otherwise be achieved with a traditional buy-and-hold strategy. See the charts below for more detailed metrics.

In addition to our strong performance, 2022 was also an exciting year for strategy launches at alphaAI. In October, we launched a new category of strategy: Tactical Long-Short (TLS). Our TLS strategies are ideal for investors looking to profit from both up and down markets, in addition to risk management that adjusts to market conditions. The primary differentiator of these strategies is that under poor market conditions, they gain exposure to an inverse ETF to hedge against and potentially profit from market declines. Our TLS strategies have gotten off to a strong start, delivering significantly higher alpha and Sharpe Ratio levels than the market. More detailed metrics can be found in the charts below.

2023 will be another exciting year for alphaAI. We will be officially launching yet another type of strategy: Absolute Return (AR). AR strategies have historically outperformed during recessions and times of high volatility. Although such strategies have typically only been available to institutions and ultra-high-net-worth individuals, we have used automation and ETFs to make them available to everyone for a low fee.

Our AR strategies are ideal for sophisticated investors seeking returns that are uncorrelated with the market. These strategies have a persistent, long-short market exposure, which enables positive returns to be achieved regardless of market conditions. Long exposure is attained through ETFs, while short exposure is gained through an inverse ETF. If you are interested in alternative investment strategies, be on the lookout for an official announcement coming soon.


Core Tactical Long-Only Strategies Track Record


Core Tactical Long-Short Strategies Track Record


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