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Pacific Wealth Management Market Comment (Dec '21)

Investing Insights

  • Following three consecutive years of exceptional returns from United States equity investments, stocks are likely to have a bumpier ride in 2022.
  • Although we expect the pace of economic growth to slow because of several dislocations, we remain optimistic our American economy will continue expanding in the new year.
  • We are pleased our upcoming transition in custodian banks, from Pershing to Charles Schwab, will improve the Pacific Wealth Management client experience.

We hope you are enjoying this holiday season and have been able to share it with family and friends.

As discussed in our most recent Market Comment and Webinar, financial markets are transitioning into a period of elevated volatility.  Following three consecutive years of exceptional returns from United States equity investments, stocks are likely to have a bumpier ride in 2022.

The ongoing pandemic and trillions of stimulus dollars governments injected into economies to support businesses and consumers have created many dislocations that will take time to work through.  Supply-chain bottlenecks, labor shortages, and pent-up demand are creating inflation at levels we have not seen in 40 years.  Today this inflation is more of a concern to the average investor than COVID.  Although we expect the pace of economic growth to slow because of these dislocations, we remain optimistic our American economy will continue expanding in the new year.

Corporate earnings should continue growing nicely in 2022. Although we anticipate interest rates to trend higher, as the U. S. Federal Reserve Bank tapers its bond market manipulation and begins increasing Fed Funds rates, we expect overall rates to remain relatively low throughout the year.  Inflation and interest rates will be a key component of financial market risk we will continue monitoring closely.

Please let us know if we can be a resource for you.

Our Pacific Wealth Management team wishes you a Happy and Healthy 2022!


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