2022—Dusting Off Our Crystal Ball II
“It’s tough to make predictions, especially about the future.”
—attributed to baseball manager/philosopher Yogi Berra
Last week, we reviewed important trends that may impact stocks in 2022. Today, let’s look at two performance gauges.
The January barometer
Since 1945, when the market is up in January, it has finished higher 75% of the time, according to Fidelity.
- Perhaps, the proclivity of the market to rise plays a big role.
However, since 1950, in 13 out of 27 years when January finished lower, the stock market ended the year higher. That was the case in 2020 and 2021.
Last year, the S&P 500 Index1 exceeded 20%. What happens next?
Such an advance has happened 26 times since 1950, per S&P data from the NYU Stern School of Business. The data include reinvested dividends.
- The S&P 500 Index finished higher 20 times in the following year and rose an average of 18.1%.
- In the six years it fell, the index lost an average of 6.1%.
Investor’s corner
These exercises are interesting. But let’s never forget that past performance is no guarantee of future results. Each year has its own distinctions.
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.
If you are looking for assistance setting up a financial plan, let’s talk.
Finally, we want to wish you a happy and prosperous New Year!