In this month’s investment outlook, we reflect on the significant events of 2021 and look at how 2022 may unfold.
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Vaccine roll-outs and stimulus packages pushed global economic growth to 5.9% in 2021. However, it came at the cost of higher inflation, as supply chain problems collided with rising demand to push up prices.
While some of these problems remain in 2022, there is plenty to support further growth in stock markets: economic recovery should continue, with businesses and households in good shape, plus restocking from record low levels.
Investors may need to prepare for more volatility: parts of the market look highly valued, while economic growth could disappoint if inflation proves persistent. Higher interest rates are also a possibility.
Nevertheless, equity markets still hold plenty of opportunity, with more value-oriented sectors such as industrials, materials and energy likely to benefit. Asia and the Eurozone are also poised for recovery as the year progresses.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
Please remember investment involves risk. The value of investments and the income from them can fall as well as rise and investors may not receive back the original amount invested. Past performance is not a guide to future performance.