For many, a new year marks a new beginning. It’s a chance to reassess, in some cases to regroup, and in others to reinvent. With each new year also come new challenges and 2022 will be no different – along with a whole new set of changes and circumstances never seen before.
Recently, the climate has become incredibly toxic in politics, and things won’t likely improve with crucial midterm elections approaching. The markets will hang in the balance as politicians jockey for power and position. The outcome of the elections and the market’s reaction is anybody’s guess.
In 2021, the economy was a mixed bag depending on your place in it. Nobody can predict the economy’s exact path in 2022, but looking at an assessment of 2021 may be helpful.
Here’s what we know about 2021:
Fueled by stimulus checks, new investors flooded the stock and crypto markets with billions of dollars, bringing along with them volatility borne of inexperience, meme stocks, and social media.
Along with free money, supply-chain bottlenecks and labor shortages contributed to soaring prices as demand and the cost for everything, including houses, cars, electronics, and household goods, outstripped the supply.
COVID-19 continued to linger in 2021 with a new variant – Delta – wreaking havoc – physically, socially, and economically. The beginning of 2022 brings challenges from a new variant – Omicron.
What can we expect in 2022? The only certainty is uncertainty.
COVID-19 is still expected to hover over the economy. Supply-chain and labor shortages are expected to persist with inflation continuing to elevate. With the Fed’s announcement in November of its intention to address inflation through interest rate increases, we can expect around three bumps in interest rates in 2022. It’s really anyone’s guess how all of these economic pieces will shake out in 2022.
We’ve touched on the overall economy, but what about your own economy?
- What about your own investments?
- How did your portfolio do in 2021?
- How did it perform in the face of all the factors affecting the broader economy?
What are your goals for your portfolio in 2022?
- More income?
- More growth?
- Less volatility?
- Insulation from inflation?
- Insulation from downturns?
- New asset classes?
- New segments?
2021 is history. You have the facts in front of you – facts on the broader economy and the facts of your investment performance.
2022 is an open book. It’s a new year, a new economy, new circumstances, and new challenges. What are your goals? Do you have a plan to face the oncoming challenges – both expected and unexpected?
2022 will be interesting. Some will retreat in the face of uncertainty. Others will relish the challenges along with the opportunities they present.
Why has fortune consistently favored the bold – those brave enough to forge ahead even in the face of turmoil and uncertainty? It’s because they know that opportunities present themselves in these circumstances.
In 2022, ask yourself what camp you will fall into? Will you embrace the new landscape and follow the bold, or will you retreat?