There’s an old axiom when it comes to investing: the market hates uncertainty. Typically, when uncertainty enters the dialogue, it’s centered around one topic. Unfortunately, as we enter 2022’s second quarter, the market faces not one but two enormous cases of uncertainty: the conflict in Ukraine and whether the Fed can engineer a soft landing from persistently high inflation. Stocks and bonds both struggled in the first quarter as reality set in that inflation in the U.S. is likely to be higher and run longer than thought when the quarter began. In addition, as the quarter came to a close, it appears that the overhang of Russia’s invasion of Ukraine could cloud markets for longer than initially anticipated. It is within the backdrop of how these two major events are likely to impact markets that we offer our outlook for various asset classes.
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