We’ve talked extensively about what could go wrong with the stock market — here’s a look at what could go right.
It’s hard not to be optimistic about the future when the S&P 500 keeps plowing to record highs despite pandemics, wars and market bubbles over the past century.
Think positively: Here are the biggest upside scenarios according to a Bloomberg survey:
- Economic growth comes in higher than expected (41.5%).
- Inflation levels fall down (23.6%).
- COVID issues subsides with no more lockdowns (22.6%).
Florida’s SBA — the fifth largest pension fund in the US — expects the bull market to go for another few years, but they’re becoming less aggressive with their investments.
The backbone of the US: Consumer spending — making up nearly 69% of the US economy — is heavily driven by Americans’ willingness to spend.
November retail sales numbers came in yesterday, lower than expected — 0.3% vs 0.8%. While this is a sign of slowing consumer growth, HSBC investment strategist, Hussain Mehdi, thinks there’s room for positive growth surprises in 2022 (via Bloomberg):
- Spending could come from households of developed countries — which have large savings built up.
- Supply shortages — which impacted consumer spending this holiday period — could ease up and lead to higher spending.
But like we’ve seen in the past few years, be prepared for surprises — and diversify accordingly.
