26 Jan JANUARY MARKET UPDATE #2 01.26.22
JANUARY 2022 MARKET UPDATE #2
The S&P 500 is now down almost 10% from the recent highs as worries about inflation, rates and geopolitical issues dominate the tape.
As we discussed in our 2021 recap newsletter, markets were due a correction based on the duration of strong equity markets and extended valuations. Although we didn’t necessarily anticipate this happening in January, we view this as an opportunity to invest cash or build on current positions where we are underweight.
Higher valued speculative assets like Crypto, Meme Stocks, and Aggressive Technology stocks have been particularly hard hit as their values adjust to higher interest rates.
WealthSouth’s high quality approach focused on consistent earnings and reasonable valuations is holding up well in the volatility, validating our disciplined process of avoiding crowded trades.
There continues to be plenty of positive economic data points that likely will help to buoy the markets in the months ahead, including higher than average Gross Domestic Product growth.
Fourth Quarter Earnings/Guidance and the Federal Reserve will be the drivers of how volatile the seas will be in the short-term future.
We never like seeing our portfolios go down, yet we understand this is also the natural cycle of markets. Our team builds portfolios with your long-term objectives in mind knowing these types of events will occur.
Please don’t hesitate to reach out to us to discuss your portfolios and any questions you have.