Most investors love economic and market forecasts. With the markets so uncertain and volatile, our brain craves some sort of idea of what the future holds. But the markets are unpredictable – evidenced by the fact that no one can consistently predict them with accuracy. Of course, a certain forecast will be right from time to time, just like a broken clock. But market forecasts are not dependable, no matter what your brain tells you. This is why putting together a dependable forecast for 2022 is so difficult.
Unlike market and economic forecasts, my forecast for 2022 is dependable and robust because it is based on enduring investment truths and investor behavior. These factors are more dependable than market outcomes and more important to an investor’s well-being.
My 2022 Forecast
In full disclosure, the following forecast of the market for 2022 is nearly identical to my forecast for 2021 and years prior to that.
- The economy/market will do something that surprises us but will be obvious in hindsight
- Investors who watch the market often will experience more stress than those that don’t
- You will be tempted to change your investment strategy based on market performance, expert forecasts, and/or your personal beliefs about the future
- Your investment decisions and reactions to market events will have a significant influence on your personal investment return
- Investors that focus their time and attention on those things they can control will have a better investment experience than those that focus on what they wish they could control
Conviction, patience, and discipline are virtues every investor should develop. They aren’t easy, yet they are essential for your success. As your advisor, one of my most important roles is helping you ignore the noise and focus on what really matters to your financial success.
I wish you a prosperous, fulfilling, and happy 2022. Thank you for allowing me to be your trusted partner along the journey.