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.