Although I will not be too long-winded, there is much to consider as we turn from 2021 to 2022.   Here’s to wishing you WELL as we usher in this New Year.  I find myself optimistic at each “new year” . . .like many of you.  So many unknowns, possibilities, and potential in our world. The years pass quickly, but it is fun to see each unfold.   As the pandemic moves toward “endemic”, we all are trying hard to remove it from the daily norm, but alas, it persists.

Like other Januarys, Duke and Gonzaga are in the Top 5 in basketball, Tom Brady’s team looks like a favorite for the Super Bowl, multitudes are headed to the park or gym to fulfill new year’s resolutions, and there is no shortage of “2022 Stock Market Outlooks” for the coming year that mostly say “cautiously optimistic for single digit returns”.   

We are STILL glad (as mentioned last January) for low interest rates, for slow but growing GDP, and for scary headlines.  That combination seems to work in our favor as it has for a long time. 2021 was a solid good year for the U.S. markets. . .foreign markets also, though again not doing quite as well.  We are cautiously optimistic, as well.  However, I remain of the perspective that there are several ways this market could trip up as Covid case-increases lead the headlines, inflation has everything costing more, little resolution evident on the supply crunch situation, the beginning of FED tightening, and fewer stocks leading the Indices upward.

According to MarketWatch data, nearly 20% of stocks are down 20% or greater.  The average stock is down 11% from its high.  And the average Nasdaq stock is down well over 30% from its high, albeit lofty highs in some cases.  The point is that we see indices at higher highs – carried by only a handful of stocks – and yet there is a story beneath.  The question becomes:  Will the high flyers come down and join the many, or will the many move upward to join the few leaders. 

There are a couple of more investment firms than usual advising that conditions are “ripe” for a market correction and increased volatility.  Plus we are simply overdue, though that in and of itself certainly doesn’t cause a correction.

Keep in mind that correction is healthy and brings opportunity.  We relish opportunity.

Time will tell what happens next.  We forge ahead.  As always, we will oversee with a focus on managing/limiting the downside risks.

Wishing you an uncommonly good Year 2022.  We are here to help and to navigate – Keep in touch and let us know how.

With best regards,

Key