If we look at the macro environment since 2020, we can see that investors have been facing a series of supply and demand shocks which are overlapping with little rest in between. The pandemic shutdown was a supply shock in the sense that business could not get done. Money was available. It just could not be spent. Fiscal stimulus mitigated the shocks, but it just led to higher or excessive savings. Of course, once the economy opened, the economy faced a demand shock with spending increasing but goods being unavailable from the supply chain shock. Supply chain problems started to reverse as we entered 2022, but there was another supply shock from the Ukraine War which disrupted energy prices especially in Europe. Within 2022, we can say there was a supply shock in China from COVID. Of course, we are now facing another demand shock based on a global slowdown. Don't worry there is likely to be another shocks before the year is out.
The 1990's was called the "The Great Moderation" by Ben Bernanke; however, the 21st century is turning into the century of shocks. Governments are trying to mitigate these shocks, but it is unclear they whether they are able to get the size and timing right. The monetary shock in March 2020 may have lasted too long. The fiscal stimulus may have been too large. Both contributed to increasing demand and leading to inflation. Now the Fed may be too restrictive. We will see.
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