Good Financial Reads: Advice for Investing in 2022

The turn of the New Year is approaching and, coincidentally, several market-impacting shifts are underway. These shifts are creating headwinds for consumers and the market. In this abbreviated Weekly, we look at the investment themes to watch as we head into 2022.

As you’re reading this, there is likely a major event in the news that may have you worried and is driving the stock market. The biggest mistake many individuals make is allowing fear hijack financial decision making. If you let emotion drive your investing decisions, your finances will suffer. In this article, we’ll review the impact market volatility has had in the past on investments, and what you should do in the face of the next market downturn.

The last two weeks have confirmed what we’ve been talking about in recent months: central banks are signaling that higher interest rates are coming. The inflation boogeyman they roundly ignored in 2021 as being “transitory” isn’t going away and now they’re being forced to play catch-up. This change in monetary policy has brought – and will continue to bring – volatility to stock and bond markets. In this week’s post we review what’s happened and what this means for markets as we move through 2022.

On Wall Street, it’s always fun sport to take the first trading days of a New Year and muse about what they might mean for the rest of the year. Most of the time, early January trading doesn’t mean a lot. But as we are in the midst of several cross-currents hitting the economy and stock market, we shouldn’t avoid thinking about what signals are being sent by the stock market. One of the biggest questions on the minds of investors is, “Will Value Stocks Beat Growth Stocks in 2022?” We’ll look at this question and take a broader look at the makeup of the stock market as we head into the New Year.

Interest rates are rising from generational lows. We’re seeing stock and bond markets react to this shift in monetary policy. Higher rates are a relief to some, but for others, higher rates present their own risks. What’s the impact of higher interest rates?