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Macroeconomic Outlook: A Clash of the Titans

Diversification is essential for the dynamic investment environment in 2022 as the Fed grapples with inflation

Global equity markets finished 2021 surprisingly strong despite headwinds created by inflation fears and the emergence of COVID-19 variants. As long-term investors, we applaud the third consecutive year of extremely robust US equity returns, while also looking to the future with clear eyes.

2022 will likely be a very different year and potentially quite dynamic. As we consider the probable drivers and possible investment outcomes for the coming year, one thing is certain — diversification is the most formidable strategy we can wield against the unknowns of 2022.

Key Takeaways

  • The Russell 3000 Index delivered a startlingly strong 25.66% return in 2021 on the heels of a 20% gain in 2020 and 31% in 2019.
  • The big story in 2022 story will be a Clash of the Titans as the long running bull market squares off against potentially spiraling inflation and the Fed’s ability to contain it.
  • As we consider probable drivers and possible investment outcomes for the coming year, one thing is certain — diversification is a formidable shield against the unknowns of 2022.
  • Although short-term sentiment is bearish, technological revolution and tremendous capital efficiency across the globe paint an optimistic picture for long-term ownership of assets.

 

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About Pitcairn

Pitcairn is a true family office and leader in helping families navigate the challenges and opportunities created by the interplay of family and financial dynamics. Through Wealth Momentum®, an experience-based family office model, Pitcairn helps families achieve a more effective and complete experience. Since its inception, Pitcairn has partnered with some of the world’s wealthiest families to meet their needs and drive better outcomes – year to year, decade to decade, generation to generation. Today, Pitcairn is recognized as an innovator, guiding families through generational transitions and redefining the industry standard for family offices. The firm is located in Philadelphia, with offices in New York and Washington, DC and a network of resources around the world.