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Here’s what investors should expect in 2022


This year was one that forecasters (not investors) would like to forget. They were wrong (including me) on the S&P 500’s return and many economic variables. This was due to corporate profits and the economy’s surprisingly robust recovery from the pandemic. Now with omicron and inflation uncertainty, forecasting 2022 is as challenging. However, I’m going to provide one plausible scenario for 2022.

First, let’s review 2021.

In 2021, inflation-adjusted U.S. Gross Domestic Product (GDP) “growth” will be about 5.6%. Inflation will be much higher than Fed’s 2% target, almost 7%. And at 4.2%, the U.S. is essentially at the Fed’s target for “full employment.” Despite inflation, the S&P 500 is setting records, recently up over 25%.

I expect earnings per share (eps) for 2022 to increase modestly from 2021 levels, up perhaps 6.8%.

What else is possible for 2022?

Since the Democrats control the White House, the House and Senate, there is still a…

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