While stock markets expect continued growth in 2022, unpredictability and volatility preach for balancing investments.
Technology stocks and the Nasdaq acted as a shelter in the 2020 Covid-19 downturn, generating significant value growths and providing support to a large-cap recovery in the first half of 2021. The brutal Nasdaq correction that started in the Fall of 2021 reminds us that the pandemic-induced economy has patterns of its own.
Early January 2022, a Bloomberg survey of leading financial institutions’ opinions for the year showed a consensus for growth – yet reduced - as well as low predictability per industry segments, and general volatility. A backdrop of inflation (finally revealed!) adds to the cautionary forecast. Around the same time Jamie Dimon, JP Morgan’s respected CEO, agreed to the forecast of high volatility.
Investors in need of some liquidity may want to hedge their bets and balance their investments between large/small caps, growth/income, domestic and international.
See https://www.bloomberg.com/graphics/2022-investment-outlooks/ and https://on.mktw.net/3Gecnl7