When you really step back and think about it, should we have expected anything different from 2021 than more unpredictability? Clearly, the answer is no. Although we all crave certainty, the world around us seems to be in short supply of that commodity (like many others).
The COVID-19 Crisis continues to confuse and confound many. Some thought the vaccine breakthroughs would signal the beginning of the end of the pandemic and life interrupted, but that hasn’t happened. Many people who have had three shots of the vaccine are still catching the virus, although it seems to be quite mild. This is a good development, yet it also is telling us COVID-19 and its variants are alive and well, and will continue to bug us for the foreseeable future. Can we manage it a whole lot better than a year ago? Yes, we can, fortunately. But a return to normalcy, i.e. no extraordinary precautions, doesn’t seem to be in the cards at this point. We are resilient – we humans – so unless one is completely locked on the sensationalized news channels, we will overcome this challenge and get on with our lives.
The pandemic has and will probably continue to dominate the headlines in 2022, although its affect on the markets should be very diminished, in our view. When you look back at history, it’s the shock events that really impact markets, and we doubt that the COVID-19 virus will throw us a wildly unexpected curveball next year. Unless and until that happens, we see rather mild effects from virus-related news (pun intended).
Another attention-grabbing headline for 2022 will be the US Federal Reserve and their policy decisions around money and interest rates. While we strongly opposed the heavy hand of the government interfering and influencing the markets as they have, their solutions, so far, have worked. It’s no secret we, along with many others, can see a really bad result from all of the money printing, on the order of trillions of dollars, in our near future. Heretofore that has not happened. In fact, quite the opposite. The markets overall have been surprisingly stable even though we all know you can’t just print money to the moon and have there be no negative consequences. The age-old question of ‘when’ rather an ‘if’ seems quite apropos.
Our answer to the great uncertainties of our time is and will remain, “Do your thing until the markets tell you otherwise.” Translation: adhere to the principals of sound investing as long as they are working. The only asterisk to this approach is, be ready to adjust, modify, and morph your strategies if they start to fail. This, as we say, is where the art meets the science. Given their is no playbook or historical precedent for the dynamics in the markets today (interest rates, government interventions, pandemic, political and geopolitical risks) we have to continue to stay extra vigilant to those situations that could cause you harm in the pursuit of meeting you financial goals. It is a challenge we embrace and welcome on your behalf.
Hope everyone has a safe and relaxing Holiday and a Happy New Year – we look forward to working with you and connecting in 2022!