The fourth quarter closed out 2021 with a bang in the U.S. stock market, and the developed international markets weren’t bad either. It was a tough year for bonds and emerging market stocks.

It is no surprise we started 2022 with volatility and higher inflation. Nagging inflation and Fed policy can fuel this volatility throughout the year. And volatility has a way of creating opportunity.

The U.S. is still booming, at least for the near-term. U.S. households and corporations (on average) are fiscally healthy, the cost to borrow is still low, employment growth is strong, and wages continue to escalate.  

We can’t forget that the stock market has historically correlated positively to inflation. Yet, this is a time to have one’s greed factor in check. Facing a potential inflection point – 6, maybe 12 months in front of us showcases the value of a disciplined approach to investing and managing to a long-term investment strategy.

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