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What does 2022 have in store?

4th February 2022

As we all settle in to 2022, after the challenges of the last couple of years, it’s only natural to ponder what the year ahead has in store for us all. While ongoing concerns about new variants, supply chain disruption and rising inflation may be disconcerting for investors, the next 12 months are likely to hold opportunities as well as risks, as we hopefully journey towards a post-pandemic future.

 

Prior to the emergence of the Omicron variant, the International Monetary Fund (IMF) predicted a continuation of the global recovery in 2022 with the world economy forecast to grow by 4.9%. However, there was an acknowledgement that the degree of uncertainty surrounding prospects had risen, with policy choices becoming more difficult and complex.

A key area of concern relates to the new virus strain which the Organisation for Economic Co-operation and Development (OECD) Chief Economist Laurence Boone said could pose “a threat to the recovery, delaying a return to normality or something even worse.” While the forecasting agency did warn that the new variant threatens to intensify the imbalances that are slowing growth and raising inflationary pressures, it also advised monetary policymakers to be ‘cautious,’ stating that the most pressing policy requirement was currently to accelerate the vaccine roll-out programme globally.

Be strategic to build your wealth

Global supply chain issues and rising inflation have created a policy dilemma for central banks. These dual concerns have heightened the need for investors to adopt careful and considered strategic thinking to reposition their portfolios to take advantage of opportunities while ensuring their wealth is inflation proofed as well as possible. With deposit-based savings rates forecast to remain at low levels, such slim returns have prompted many savers to shift their money into investments, with research1 suggesting over half of all adults have done so. This move has raised concerns that unrealistically high return expectations could leave some investors susceptible to investment scams.

It’s all about you

While 2022 is sure to present challenges and opportunities for investors, adopting a carefully considered strategy based on sound financial planning principles will be key.

1Aegon, 2021

It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.

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