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Kavan Choksi on The U.S. Stock Market’s Performance

Kavan Choksi believes January was the cruelest month since the pandemic began. It was simply volatile last year, with the S&P 500 roaring into the year at an all-time high and limping into February down 5.3 percent. Furthermore, the benchmark index fell by at least 1% on six different trading days in January, compared to only 21 times in 2021. In a nutshell, volatility has returned to the United States stock market.

 

In January, the U.S. stock market succumbed to the pullback that many had predicted would occur in the latter half of 2021. At one point, the S&P 500 flirted with a market correction, falling as much as 9.8 percent from its previous all-time high. Unfortunately, this is a far cry from last year, when all three major US stock indexes rose by at least 18%. As industry leaders predict that February will be more of the same, Kavan Choksi believes investors must understand what to expect.

 

What Should You Invest In As 2022 Begins?

Professional investors will almost certainly spend most of February anticipating rate hikes, which could begin in March. So, rather than attempting to profit from all the short-term unknowns surrounding inflation and rate hikes, Kavan Choksi advises focusing on constructing a portfolio that can last the long haul.

 

The tried-and-true advice of focusing on diversification still holds though you may want to speed up the process of rebalancing your portfolio. Furthermore, volatile market conditions, such as January saw, may present an opportunity for investors seeking to profit from market dips.

 

According to Kavan Choksi, experts expected the volatility at the index level to happen, but it took a little longer this time. After the S&P 500 gained nearly 27 percent in 2021, you may want to revise your expectations for returns this year. Furthermore, most Wall Street strategists anticipate single-digit returns this year, as well as more normal returns and increased volatility. It means that returns should be closer to the long-term historical average of just under 10%, rather than doubling or nearly tripling as was seen in recent years.

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