One of the key concepts to keeping this economic recovery going is the need to stop relying on monetary and fiscal policy. In 2022 we expect a handoff to take place and for consumers, small businesses, and capital investments to take the baton and help this cycle of growth continue.

On the economic front, we expect U.S. gross domestic product (GDP) to grow between 4.0 and 4.5% in 2022, not as strong as 2021, but still a very strong year.

Our fair value target on the S&P 500 is between 5,000 and 5,100 at the end of 2022. Solid economic growth and earnings growth will help drive the gains, while we continue to favor U.S. over developed international, value over growth, and cyclicals over defenses.

Lastly, we expect modest moves higher in yields, with our 2022 forecast for the 10-year Treasury yield between 1.75% and 2.0%. Returns are likely to be flat to slightly positive, with stocks outperforming bonds again.

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth in the podcast may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. All indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index data is from FactSet.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This Research material was prepared by LPL Financial, LLC. 

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