MARKET UPDATE | FOURTH QUARTER 2021

Adam Recker, CFA, CFP® & Michael Furla, CFA, CFP®

Two years into the pandemic, we are faced with levels of inflation not seen in 40 years. To stabilize prices, the Federal Reserve (Fed) plans to tighten monetary policy by raising interest rates and shrinking its almost $9 trillion balance sheet. Despite this and supply chain disruptions, markets continue to break all-time highs as U.S. stock returns were strong in 2021. International returns were suppressed due to Chinese reforms and COVID-19 in 2021 but were generally positive. While bond performance was muted in 2021 due to rising yields, they are a vital risk-mitigation tool in a well-diversified portfolio.

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