Over the past ten-plus years, we have witnessed unprecedented growth in equity markets, as Central Banks around the world lowered interest rates and boosted bond purchases. Rising inflation is now expected to force these bankers to curtail stimulus, amidst a back-drop of geo-political concerns–slowing growth in China, Russian troops amassing on the Ukraine border, and mid-term elections stateside. Economic growth is expected to continue, sustaining advancements in equity valuations. Still increased volatility may become the norm as markets grapple with uncertainty. While investors should prepare for some instability, they should also prepare to stay the course; a long-term perspective is the best defense. Allocation and fundamental selection will be critical, as investors embrace a changing horizon.

Long-Term Perspective on Markets and Economies

 

source:  Capital Group Outlook 2022 Edition