2021 Market Review with Derek Hoyt and David PeytonJanuary 20, 2022
In this episode of Up and Adam, Adam sits down and talks with Derek Hoyt, Chief Investment Officer, and David Peyton, Portfolio Manager, with the BerganKDV Wealth Management Solution’s Investment Team to reflect on 2021 market activity and results.
2021 was a great year for risk assets. The S&P gained 28.7% while hitting a record high 70 times throughout the year and volatility was relatively absent. Domestic markets led global returns and narrow leadership pulled indexes higher in the second half.
Adam asks David and Derek to explain the discrepancy between domestic and international returns. David talks about how domestic returns have outpaced international returns for a long time. There are some instances where international will catch up, but over the long haul that hasn’t happened in a while.
The three then pivot to discuss fourth quarter market activity in 2021 and how it looked different compared to earlier in the year. Adam goes on to ask about price to earnings (PE) ratio, where it sits right now and if 2022 could be a little quieter compared to last year. Derek gives his insight on why PE is tough to use as a predictor.
Adam transitions the conversation to discuss tax reform, a common topic on the minds of his clients. Adam asks David and Derek how might potential tax reform and changes to capital gain structure impact the market. He then asks the two about midterm elections and if they have an effect on market activity.
To wrap up their conversation, Adam asks Derek and David to make predictions on what 2022 may bring to the market. They share how the new year brings new uncertainties as inflation remains elevated, markets are fully valued, the Fed looks to pivot, mid-term elections are approaching, and taxes changes remain a question. These dynamics make returns in the coming year a challenge, but not impossible.
If you have additional questions about investment strategies and mitigating risks for your investment portfolio; BerganKDV can help. Contact our team to set up an introductory call with our Wealth Management team to discuss your financial planning needs.