Vanguard Says Investors Will Need Value And International Stocks In 2022

Here’s a 10 pointer summary for you all:

  1. The easy gains in economic growth caused by reopening are in the rearview mirror for developed economies, but strong demand, coupled with supply problems, are “going to take some time to stabilize” in 2022.
  2. Their economic outlook is that the macroeconomic policy would become a more powerful force than Covid-19 as business activity plays out this year.
  3. The Fed enters 2022 finding itself in a very precarious position, according to Vanguard.
  4. Patterson said the Fed wants “to avoid a wage-price spiral like the 1970s.”
  5. In particular, Vanguard favours equities in non-U.S. developed markets.
  6. Vanguard expects growth in the U.S. and Euro area to decline to the 4% area, which remains far ahead of the pace of the past two decades.
  7. Vanguard’s 10-year projections call for U.S. equities as a whole to return a median of about 3.3% annually.
  8. However, the median forecast for U.S. growth stocks is a paltry 0.1% a year.
  9. The investment complex sees unhedged, non-U.S. global equities returning 6.2% a year.
  10. A return to 1970s-style inflation “is not in the cards,” Vanguard said, but the mutual fund-ETF complex expects prices to remain elevated this year. Another factor in the wake of a global public health crisis. “The Fed is starting to think that we aren’t returning to pre-pandemic [labour force] participation rates,” Patterson explained.

Source: Vanguard Says Investors Will Need Value And International Stocks In 2022 (fa-mag.com)

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