As 2022 begins, we face the third year of the COVID-19 pandemic. December ended with the Omicron variant running rampant, but nonetheless we find ourselves in a far better position than this time last year. By all appearances, the Omicron variant is a milder form of Covid and as of mid-December, the CDC reported that 77.2% of the population over 5 years over age has had at least one vaccination.1 Despite inflation, the economy demonstrated healthy growth in 2021 – just over 6% in the first two quarters and over 2% in the third. Unemployment also reached a historically low level. And the Fed announced it will be taking steps to curb inflation through interest rate hikes in 2022.
The S&P 500 ended 2021 up by close to 27% as of December 31, while international markets, as measured by MSCI EAFE Index returned almost 9% for the year.2 There are risks, including the reduction of stimulus from the Fed, inflation, and the potential of new Covid variants. While the outlook for the market is positive, the fact remains that investors should continue to pursue a disciplined, diversified strategy and remain invested throughout all market conditions. As history has shown repeatedly, investors who stay the course will be rewarded by the markets over time.
Best wishes for a safe, happy, and prosperous 2022.
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1. https://covid.cdc.gov/covid-data-tracker/#vaccinations_vacc-total-admin-rate-total
2. Yahoo! Finance
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Investors cannot invest directly in an index. Indexes have no fees. Historical performance results for investment indexes do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment management fee, the occurrence of which would have the effect of decreasing historical performance results. Actual performance for client accounts will differ from index performance.
S&P 500 Index represents the 500 leading U.S. companies, approximately 80% of the total U.S. market capitalization.
MSCI EAFE Index is an equity index which captures large and mid cap representation across 21 Developed Markets countries around the world, excluding the US and Canada.
