2022—Dusting Off Our Crystal Ball

“It’s tough to make predictions, especially about the future.”

—attributed to baseball manager/philosopher Yogi Berra.

The New Year is upon us. Looking back, the S&P 500 Index¹ is up over 25% this year through December 27, per the Wall Street Journal.

Key market drivers—

• Strong economic growth has fueled profit growth.
• Low interest rates offer less competition to stocks.

Looking at 2022

Will the rate of inflation peak soon? Peaking isn’t the same as price stability.

• The Federal Reserve has signaled a more aggressive path in 2022, as it grapples with high inflation.

Omicron and new variants

• So far, investors have side-stepped economic worries stemming from Omicron, but will new variants arise?

The economy and profits

• Economic growth drives overall profit growth. Don’t count on a repeat of 2021’s strong profits, but economic growth seems unlikely to falter.

Investor’s corner

Successful investors keep their focus on long-term goals. They have a plan.

Without a holistic financial plan and guideposts to measure progress, successfully reaching one’s financial goals becomes far more problematic.