Fed 2022 Plans Sure to impact Stock Market

The Fed has announced it will tape bond purchases, PLUS raise interest rates probably three times next year.

Whatever they raise them to, it is sure not to give saves a positive post-inflation yield.

That being said, note that people have turned to dividend stocks due to their higher yield than many bonds or interest rates. Raise interest rates, however appropriate it is, and stock prices probably will go down.

The only reason long rates are as low as they are is FED buying of tons of debt every month. Without that artificial market, long rates are certain to rise. There is not enough savings in the world to buy all the debt being issued.

Stocks should have quite a headwind next year.

You would think that but GDP is still forecast to grow 4% next year which is above the curve, unemployment is still going down which means more people are participating in the economy. And even once rates start climbing, people realize cash is dead.

Having said that, it wouldn’t hurt to sell some stocks but where are you going to put it? Gold? Maybe you can flee to dividend stocks. I’m not sure what sectors I’m looking at but I’m inclined to get more energy stocks, could go as high as 33% of my portfolio.

Below the curve of what? If stocks went up 4% and inflation is 6%, how much value did your stock portfolio gain?

Inflation distorts everything.

4% gdp growth is higher than average. And im betting stocks will grow 10%+ in 2022 or I wouldn’t take the risk.

4% GDP growth in 6% inflation is no real GDP growth at all. You have got to look at things considering inflation.

How is that AT&T stock bet turning out?

My ATT stock is yielding 8+% today. It was yielding about 6.5% when I bought it, but I really don’t care about the price. I have no plans to sell it in the foreseeable future, and won’t if the price has not come back. If they lower the dividend, I may or may not care depending on what that does to the price.

I’m not talking about inflation, I’m saying the forecast for growth gives ammo to the notion that stocks will do well in 2022. And if inflation is 6% that could be more ammo, people will be looking for growth or perhaps dividend stocks.

I never did get ATT and I give you at least a little credit for that. On a down day I set a limit order that never did execute and I abandoned the idea of att after that. That’s a unique stock, one that nobody on the street likes. (the dividend is tasty, but I was looking for growth with that particular bucket of money)

My point is this.

If inflation is 6%, GDP growth must be at least 6% to have zero real GDP growth.

Same principle for stocks. Inflation distorts perceptions.

If the company drowns in debt on its unwise acquisitions and bankrupts, the price will go to zero along with the dividends. Will you care then?

This is a very poorly run company that is running off customers.

Within the last few months, ATT sold its nonperforming businesses in Europe, sold an interest in Warner Media to Discovery and formed a new media company, and spun off the loser Direct TV. Just this week, Barron’s had ATT on their list of ten stocks to own going into 2022. They will never be a meme stock, but I don’t see them going way either.

Last guess I saw was they expect the market to tank in 2022.

The autistic doctor said it’s time to crash and it’s going to crash hard. He predicted 08 but he also bet against musk.

Personally I think the market should have crashed already.

It shows it’s a guess even for the most educated (not including myself in that category. I know enough to invest but not enough to calculate based on formulas)

No bank im aware of has predicted a crash or even a flat 2022. The mean of predictions im seeing are 10-15% gain which is just okay as compared to last few years. Of course it could correct but if it does my money is staying put. At this point I probably won’t add stocks in corrections.

Hope it works out for you. I kept hoping for a renaissance and held on to a few shares. If you look at the graph on Bigcharts.com it is a steady price decline over time. Darn I wish I had sold all shares a year ago. And some people just think they will double down at a lower price!

Will the company reinvent itself?

I have met so many business customers like me who used to use AT&T, and were so angered by the wait times to talk to a human in India that they swore off ever using the company again.

What can you say about the company that owns CNN and does nothing to stem the declining viewership? Management is either incompetent or just doesn’t give a crap. GE and AT&T are birds of a feather. Plenty of acquisitions with no ability to manage them.

How many predicted the crash of 2008? How many board directors of the FED did?

But I am with you. I don’t predict a crash with all the new money being put into existence. However let us be honest:

  1. The FED announced probably 3 rate hikes in 2022. How do rate hikes usually affect the stock market?

  2. The FED announced tapering of its asset buying programs in 2022. How will decreased demand by our and other nations’ central banks affect asset prices?

Stock prices have been juiced both by suppressed interest rates and central bank asset buying. This will change in 2022. A crash is probably not in the cards, but a flat market and perhaps a recession will be.

Michael burry is calling a crash in 2022. A major crash

Don’t let politics affect decisions on your money. I have no problem betting against the Dolphins although I’ve been a fan for decades.

Not doing that at all. I don’t watch any TV. True CNN has a leftist slant, but its viewership is not increasing.

Several employees of Turner Broadcasting are patients of mine. They are all quite unhappy with their employment since AT&T took over. AT&T’s strategy is always penny-pinching, never expanding its markets. It is a stagnant company.

Every year SOMEONE calls for a stock market crash in every coming year. Every once is a great while someone is right.

Burry has a good track record. Now he does say emotions can drive the market as much as fundamentals (paraphrasing).

He said the market is extremely overvalued and it doesn’t make any sense.

His big claim to fame is the 2008 crash where he made a lot of money. He said 2022 may continue just fine but when the market does crash, it’s going to crash worse than we have ever seen.

I’m no expert but I’d say emotions have had a bigger effect on stocks than fundamentals since March 2020 at least. The dump the market took then was uncalled for and a lot of what’s happened since is uncalled for.