2021 Market Review: Variants and Variances
On January 11, 2022, BDF LLC held its virtual Annual Client Event. Chad Carlson, Chief Investment Officer, and Investment Committee members Tina McMorris Barrile and Jonathan Baker discussed a number of topics around the markets, looking back to what happened in 2021 and looking forward to 2022 and beyond.
Themes touched on include:
2021 Review: Strong equity returns were highlighted by a strong year from small value stocks, while bonds faced some headwinds from a challenging interest rate environment.
Economy: Markets have been boosted by a strong recovery in consumer spending. Unemployment rates continue to decrease as companies have increased confidence in economic growth and look to boost headcount to service increased demand.
Inflation: Inflation continues to drive headlines as energy prices and supply chain issues drive top-line inflation. Economists and the market see the light at the end of the tunnel as long-term inflation expectations continue to stay tied to historical norms. Still, numbers will likely remain elevated for a while in 2022.
Valuations: While markets continue to hit highs, there are still attractive spots where valuations indicate appealing investment opportunities.
Fixed Income: Despite a challenging interest rate environment, bonds still serve to provide diversification against equity risk and the ability to outpace parking money in cash.