It’s hard to believe that 2021 is coming to an end, but it is. A lot has happened this year!
Headlines impact financial decisions a lot and therefore the market. The stock market in the short run is unpredictable. Look at financial predictions made last year. How many of those are true, today?
As we’ve seen with COVID variants, the market fluctuates depending on current events. What we eventually thought would be a three-year process for a vaccine ended up being a lot shorter. Therefore, market predictions changed again. With the vaccine came a lot of perks. The economy was opening back up. Yet, with this “return to somewhat normal” came supply shortages and inflation.
Is this inflation permanent or transitory? For almost an entire year we’ve heard from politicians and media professionals that it’s transitory. But now they are changing their tune.
A surprise to many was the drop in the workforce. A shortage of workers can lead to all kinds of problems, including inflation. There is some good news though, Social Security checks will compensate for this rise and will be going up. But look out for increases in your Medicare premiums too.
The only prediction we can make in confidence is that there is going to be more news. Here’s the bottom line: we always need to be prepared. We can do that through diversification. If inflation is high, you need assets that will respond well. If it’s low, you need protected assets. Working with your advisor to diversify according to your risk tolerance will be important going into 2022.
Listen to the full episode to learn more or skip around to certain topics.
[1:06] – 2021 is coming to an end
[2:47] – Highlights, headlines, and predictions
[3:47] – Let’s not put too much pressure on 2022
[5:24] – Making financial decisions based on the news
[7:30] – COVID impacting the market
[10:27] – Is this inflation permanent?
[14:00] – Political review of 2021
[15:13] – Being prepared for the next year
[17:03] – Investments in crypto currency