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The Best (And Simplest) Bear Case For Bulletproof Stocks
It's fair to suggest the macro consensus headed into 2022 is that inflation will remain generally elevated (even if it starts to abate in the back half of the year), prompting central banks to tighten policy, quite possibly to the detriment of risk assets.
Take the S&P, for example. It remained above its 200-DMA for the entirety of 2021 (figure below), notching nearly six-dozen record closing highs in the process.
Only four times in 40 years has the index gone an entire year without breach
It was not Rocket Science to predict Inflation at levels seen in this last year but that is not the same as making windfall profits in the Equity markets.. Lasting impacts of all the Sociological issues will destabilize the Economic playing field and much like our Climate issues yield huge changes . I predict 2022 will yield a Geopolitical Nightmare to remember just like Economic and Climate issues will .
H-Man, while “bad” things may be on the horizon — the challenge is turning a “bad” thing into a “good” thing for your portfolio. Covid was a “bad” thing in March of 2020 but depending on how you dealt with volatility, it could have been a “good” thing.