Cyber Stocks

An Investment Lesson From 2021

Just about every year the stock market teaches us important lessons that we can learn and apply to become better investors.  2021 was no exception.

2021 was a fantastic year for the stock market, with the S&P 500 Index up over 25%.  Despite the strong performance, there were plenty of concerns along the way that could have influenced an investor to throw in the towel.

We experienced inflationary pressures and it was a major theme throughout the year with concerns of what that would do to the markets.  We also had supply chain issues with cargo ships sitting off the coast of the US, perhaps adding more fuel to inflation and concern for the health of the economy.  And just recently, we have had the Omicron variant with a significant spike in cases.

Yet, despite all these concerns, the market did very well.  It is said that markets climb a wall of worry, and that was validated in 2021.  Of course, markets don’t always go up, but having concerns or unanswered issues does not mean the market will go down.  Of course, no one can predict the markets with any certainty.

2021 is a good reminder that markets can do well in the face of uncertainty and concerns.  Our investment decisions shouldn’t be based on how concerned we are or how we feel, as those tend to change often.  Instead, we should ensure our investment decisions are based on our plan, our situation and guidance from our financial advisor – irrespective of what the worry of the day is at that moment.

©2022 The Behavioral Finance Network.  Used with permission
Past performance does not guarantee future success and no one can predict the markets with any certainty.  The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.  All indices are unmanaged and may not be invested into directly.  The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  No strategy assures success or protects against loss.