Interest rates

What to expect for stocks, interest rates and housing this year

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Reflecting on the stock market performance of the past few years reminds me of a saying from when I was a stockbroker: “Bulls make money, bears make money, and pigs get slaughtered.”

The S&P 500 stock index rose 29% in 2019, 16% in 2020 and around 27% in 2021.

Given that equities are averaging around 10% per year, such returns are highly unlikely to sustain for long. Sooner or later, unless the world fundamentally changes, markets will regress towards the mean. In other words, they’ll even things out with a lousy year or two.

Will 2022 be the year it starts?

One of the catalysts for falling stock prices could be rising interest rates. Chances are the Federal Reserve will start raising rates as early as March 2022. While rate hikes aren’t necessarily devastating for stock prices, they aren’t the best thing for them either, especially for more speculative and less profitable businesses.

So, does all this negative news mean you should retire in 2022?

That’s what the show “Money!” this week’s podcast is about. We’re going to talk about how things are likely to go this year with equities, interest rates and house prices. And not only will we attempt predictions, but we will also make recommendations.

As usual, my co-host will be financial journalist Miranda Marquit. Rookie producer and investor Aaron Freeman listens and sometimes contributes.

Sit back, relax and listen to “Money!” Podcast:

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