My 3 Biggest Stock Market Predictions for the Rest of 2022

First, let me say that I do not there is a crystal ball. I cannot predict the future with certainty, and much of what has happened so far in 2022 has been truly surprising.

That said, it can be helpful to make some educated guesses. I usually do a year-end article with my bold predictions, but it seemed appropriate to do a mid-year version, given how the economy and the stock market have changed. So without further delay, here are three bold predictions for the stock market for the rest of 2022 and what I’m doing to set myself up for success going forward, whether I’m right or not. wrong.

1. The Fed Will Control Inflation – But at a Cost

In my latest bold year-end prediction, I said that inflation would be harder to control than the Fed thought at the time, and unfortunately, this proved to be true. At the time, the average inflation rate for 2022 that the Fed projected was just 2.2%. Now that policymakers seem to have a better understanding of the situation, I believe the Fed will be able to keep inflation under control, but not before a series of rate hikes push the Federal Funds Rate up. 4% or more.

2. Growth stocks will remain “on sale” for a while

I spent most of my investment in this correction accumulating stocks of high-growth companies that I think I missed in 2020 and 2021. I added. Shopify added to my portfolio recently and added MercadoLibre and Unit.

Having said that, a bullish rate environment and recession fears simply aren’t in favor of any of these stocks retrieving their all-time highs. All of this can definitely reach new highs finalBut I don’t see that happening until inflation cools, the economy grows healthy, and rates start to fall.

3. We’ll Have a Recession, but a Mild Recession

Technically, this could happen in 2023, but the seeds are definitely being planted right now. To be clear, we Not in a recession that hasn’t happened yet and the term is defined as two straight quarters of falling GDP, but housing starts to disappoint, layoffs start to dominate headlines and confidence consumers began to decline.

With the Fed poised to raise interest rates aggressively for the rest of the year, a recession seems inevitable. However, I don’t see deep recession, just a mild and somewhat short-lived recession.

How am I investing right now

To be completely clear, this is mine guessand I’m pretty sure all of them won’t be right. But there are a few things I feel 99% certain about:

• This bear market won’t last forever.
• The S&P 500 will be significantly higher in a decade or two than it is today.
• When the stock market drops 25%, this is a great time to buy shares of outstanding businesses.

With that said, I’m focusing on investing in profitable, high-quality businesses that can weather any economic storm, and I’m not slowing down. I actively contribute to retirement accounts and buy shares of my favorite stocks.

It’s entirely possible that we haven’t seen a bottom yet, but as a long-term investor, I’m fine with that. I’m very confident that no matter what happens for the rest of this year, I’ll be glad I’ve decided to watch the long term and invest through the tough times.