Market Outlook · January 28, 2022

Making Sense: January Highlights

Brent Ciliano

CFA | SVP, Chief Investment Officer

Phillip Neuhart

SVP, Manager of Institutional Portfolio Strategy

Historically, drawdowns of 20% or less haven't lasted for long

From 1928 through 2021, we observed drawdowns of:

  • 10% or less recovered fully inside 6 months
  • 10% to 15% recovered fully inside of 9 months
  • 10% to 20% effectively recovered within 12 months

Following the Great Financial Crisis, the recovery time was even shorter, with most drawdowns of 20% or less seeing a full recovery in 3 months. While it can be very nerve wracking to see the value of your investments fall, understand that it usually doesn't last long. Reacting to sell-offs by moving out of stocks can be incredibly detrimental to the achievement of your goals and objectives.

The bottom line for markets

  1. Our year-end S&P 500 price target of 4,700 was achieved. The S&P 500 ended 2021 at 4,766.18.
  2. Wall Street consensus S&P 500 12-month forward price target as of January 25th is 5,264.13, or 10.5% return from 2021's close.
  3. Our 2022 S&P 500 price target is 4,900, equating to around an increase of 3% growth over 2021, but we expect a much more volatile year.
  4. We believe the full market cycle can last through year-end 2023 and potentially reach 5,500 greater, but much can and will change along the way.

Learn more about our thoughts on where the market goes from here and other topics on the full webinar replay.

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