Happy New Year! As I look back over the years that I have been in the financial services industry, there has not been a single year there were not obvious obstacles. 2022 is no exception, so here are some thoughts on what we might expect for this year. Several factors indicate a potentially challenging investment landscape in 2022. A mix of economic, policy and geopolitical risks, along with persistent inflation, slower growth, monetary policy tightening and rising interest rates, to name a few. Some things to consider —
Strong corporate profits and continued, enthusiastic consumer spending should help keep the U.S. economy healthy in 2022. While inflation can be a hazard to investors, there are things that can help balance the risk. Because inflation quietly erodes purchasing power, cash assets can be significantly affected. The stocks of companies that can adjust prices by passing higher costs along to customers, can protect profit margins and tend to hold up over meaningful blocks of time even during inflationary periods. Bonds typically trend down in price as interest rates rise but still hold a place in most portfolios to provide stability. The following graphs illustrate historical returns of both equities (stocks) and fixed income (bonds) at various rates of inflation, showing us, there are reasons for optimism in the current economic environment.
We are celebrating some milestones at BF&A this year. Diane Stewart has been with the company for 25 years. More often than not, her cheerful voice is the first one you hear when calling our office. I have always appreciated her willingness to step up to any challenge and to jump in to help wherever needed. We have worked together at various companies for over 30 years and she deserves a lot of credit for the success that BF&A has experienced. Please help me in congratulating Diane the next time you speak with her. When I joined BF&A in January of 2002, I planned to work here for 20 years. Well, my 20th anniversary has arrived and now that that finish line has been reached, I find I am not quite ready to fully retire yet. Over the years I have met with most of you and shared my philosophy of the 3 boxes you need to able to check in order to continue working after you can retire— they are —1) you still love what you do, 2) work is not causing you too much stress, 3) you have sufficient time to do the things you enjoy. If you can check all 3 boxes, continue to work. So far, I can check all the boxes, but I will give you plenty of notice should that change.
I wish you a healthy and prosperous 2022!
All the best,
— Priscilla "Cilla" McKinley
President - Brent Forrest & Associates LLC
*Brent Forrest & Associates, LLC may discuss and display, charts, graphs, formulas, and specific holdings which are not intended to be used by themselves to determine which securities to buy or sell, or when to buy or sell them. These are offered with limited information and should not be used on their own to make investment decisions.