The 2022 selloff, explained without using the word ‘macro’.

In 2022, almost every asset class fell at the same time. Stocks fell. Bonds fell. Crypto fell. Tech, the asset class many young investors had concentrated portfolios in, fell hardest. If you were 22 and had only invested through the post-2020 boom, this was the first time the market behaved like the textbooks said it could.

The clearest way to understand what happened is to follow the cost of money. From 2020 to early 2022, money was historically cheap. Central banks held interest rates near zero to support economies during the pandemic. Cheap money made it rational for investors to pay high prices for any company that promised growth in the future, because a future dollar was almost as valuable as a present one.

Then inflation arrived. To slow it down, central banks raised the cost of money quickly and steadily. Suddenly a future dollar was meaningfully less valuable than a present one. The companies whose entire valuation rested on profits years away got re-priced first and hardest. That is why high-growth tech fell more than steady, profitable consumer companies.

Bonds fell for a related reason. When new bonds pay higher interest, older bonds with lower interest become less attractive, so their prices drop. This is mechanical. It is not opinion.

Crypto fell because crypto in 2021 had behaved like an extreme version of the same growth-stock dynamic. When the cost of money rose, the riskiest, longest-duration bets fell first.

None of this is a story about anyone doing anything wrong. It is a story about how interest rates change what every other price means.

If you were a young investor watching this happen, the most useful thing was not predicting it. It was understanding the system well enough to not panic-sell into the bottom. The best teaching tool we have for this is StarryTrader’s Market Cycle visual. It does not tell you where we are now. It shows you what cycles look like, so the next one feels less personal.