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2022.01.16 Penn Wealth Report Vol 10 Issue 01

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Penn Wealth Publishing Subscription Information https://www.pennwealthreport.com Penn Wealth Publishing 9393 West 110th Street 51 Corporate Woods Suite 500 Overland Park, KS 66210 4 penn wealth Report volume 10 issue 01 16 Jan 2022 Penn Wealth Report Copyright 2022. All Rights Reserved. From the Editor/ When we heard the business journalist utter the words, the comments caused an immediate flashback. "e stock mar- ket just put together its best three-year period since 1997 through 1999." We recall what it was like investing through that period and, more critically, the three-year period which would follow. Everything being said back in the late '90s about the Internet changing the way we would live and work turned out to be true, but that didn't stop a nightmarish 78% downturn in the NASDAQ beginning in 2000. Some don't recall investing during that period; not only were we investing, we were manag- ing other people's money. Despite a few recent market pullbacks, there remains unbri- dled enthusiasm for stocks in general and the high-flying NASDAQ in particular. Additionally, the TINA (there is no alternative) concept certainly holds more true today than it did twenty-two years ago. Back then, we could take comfort in the cash and fixed income portions of our portfolio, which included 4% money market rates and 8% quality bonds. Is the current lack of opportunity within the fixed income arena and specter of multiple impending rate hikes supposed to make us feel more comfortable with our giant equity portions? TINA is a danger- ous concept to base an investment strategy upon. Here's a very brief synopsis of what we see transpiring in 2022. ere will be at least one 10%-plus correction in the markets. After three scorching-hot years (which is really remark- able considering the pandemic), expect single-digit gains in the major benchmarks. Our prediction is for the S&P 500 to end up at 5,100, which would represent a 7% gain on the year. We would not, however, rule out a negative 12-month period. Gold, which is a true inflation hedge, will have a strong year, and small caps will perform nicely. While fixed income invest- ing will be like dancing in a mine field, investors will be happy they kept some cash on the sidelines. Tactical stock selection and risk management will be the keys to success in 2022. —MSH Michael S. Hazell editor-in-chief A Few Thoughts About the Year Ahead After three years of solid returns, investors should temper their enthusiasm for 2022

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