Making Sense: January Highlights
CFA | SVP, Chief Investment Officer
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
- Our year-end S&P 500 price target of 4,700 was achieved. The S&P 500 ended 2021 at 4,766.18.
- 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.
- 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.
- 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.
This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.
Your investments in securities, annuities and insurance are not insured by the FDIC or any other federal government agency and may lose value. They are not a deposit or other obligation of, or guaranteed by any bank or bank affiliate and are subject to investment risks, including possible loss of the principal amount invested. Past performance does not guarantee future results.
First Citizens Wealth Management is a registered trademark of First Citizens BancShares, Inc. First Citizens Wealth Management products and services are offered by First-Citizens Bank & Trust Company, Member FDIC; First Citizens Investor Services, Inc., Member FINRA and SIPC, an SEC-registered broker-dealer and investment advisor; and First Citizens Asset Management, Inc., an SEC-registered investment advisor.
Brokerage and investment advisory services are offered through First Citizens Investor Services, Inc., Member FINRA and SIPC. First Citizens Asset Management, Inc. provides investment advisory services.
Bank deposit products are offered by First Citizens Bank, Member FDIC.