Hello, and welcome to the very first Market Alert video for the year 2022. Happy New Years to all of you! I hope that everything is coming up wonderfully for you and that the new year is off to a good start. As we do almost every year, we’re going to have our fearless forecast for the year. There was one year in the last 12 where we didn’t have one. However, this year, I’m going to get right to it because I don’t want to waste anybody’s time—since I know you guys are anxious to know what the field forecast is for 2022. Any time that I spend not telling you what it is, is wasting everybody’s time so I should not dilly dally. I should not waste any more time to tell you. I should get right to it. Should I not?
The suspense is over—the fearless forecast for 2022 is Dow 40,000. Isn’t that a nice round number? Let’s talk about why. There are several reasons—one is that the supply chain issues are turning out not to be as bad as people thought. There was a lot of concern that the shopping season would be devastated by the lack of supply. As it turns out, the shopping season was 8% better than last year. The supply chain issues are ameliorating little by little, and we think that as we go through the course of the year, that should continue to happen.
The Omicron variant was very concerning at first but is mild according to the World Health Organization. So hopefully this will pass as well. Furthermore, the jobs numbers this week suggests more people are going back to work. Companies need people working so they can deliver their products and services to make more profit, which generally drives their stock prices up. In our view, all those things bode very well to get to the Dow 40,000 Fearless Forecast. Last year, we predicted Dow 35,000 which seemed to be a high stretch goal—but we got there. This year, we think we’re going to have a nice rise—but what could go wrong? What could cause the applecart to be spilled over? The 800-pound gorilla in the room—the Federal Reserve.
The Federal Reserve has been responsible for many big policy errors, as we’ve talked about on previous videos. When they make a mistake, it can cost the economy a lot. The Feds are way behind the curve, and inflation is rising. They’ve decided that they’re going to start addressing the issue because the market is putting a lot of pressure to get us back to normal interest rates with the economy healing faster than expected. The Federal Reserve acts too quickly which could become a problem. If the Feds do that, they could break something. If they break something, that also wouldn’t be good. Over reaction or under reaction in either case could cause inflation to get worse.
We’re anticipating that inflation will probably be announced this week, or next week, at over 7%. If they react too slowly, then we could have persistent, and possibly systemic inflation. If that happens, we could have a recession. This could be a policy mistake that could create not getting to the 40,000 on the Dow. In the meantime, we do think they’ll muddle their way through—it’ll be rocky. The start of the year has been rocky, but we think we’ll be able to see Dow 40,000.
Now of course, if they do make a policy mistake or if something else comes along that we don’t know about right now, we are ready for it. This is why we have our Invest and Protect Strategy™ ready to be implemented, should anything happen. We hope that having that in place, gives you the peace of mind that we want you to have and not worry about all this. Let us do the worrying for you. You go out and enjoy your second childhood without permission supervision, that’s your job, take care of your side of it, and we’ll take care of the financial side for you.
Lastly, I want to announce that next week on the 17th we have a video that’s going to be coming out. It’s going to be a very, very exciting and major event. Please make a note that on the 17th we’re going to be sending out a video to you. It is extremely important that you watch we have some very exciting news to share with you. We’ll be sending you another teaser video here in a few days to remind you to watch that video as well. Tell all of your client friends to watch it as well if they don’t get this video. Thank you again, take care, and we’ll talk soon