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The fourth quarter of 2021 was a microcosm of 2021 as a whole. Many of the trends that we saw throughout the year continued into year end. The emergence of a new COVID variant contributed to reimposed restrictions, supply chains disruptions, and rising inflation. And, the stock market responded similarly to prior COVID scares: a knee-jerk reaction down followed immediately by a rally that culminated in new record highs. Other trends also continued as international stocks continued to trail their US counterparts despite more attractive valuation metrics, and bonds delivered another quarter of lackluster results.

It is well known that the stock and bond markets have generally gone up over time. Why else would anyone invest? Sure, there have been a few “speed bumps,” such as the Great Depression and the decade of 2000 when things didn’t work out so well (see nominal return graph), but generally investors have made money by being invested. But what happens when you factor in inflation?

A not so new New Year! Most of us planner types spent 2021 worrying about one thing or another. For some of us, a lot of frenetic energy was spent on the projected, proposed, and much debated financial changes that the President, and much of Congress, hoped would reboot a lot of well-established financial plans.

Another year has come and gone. In our business the New Year means lots of reporting. Certainly, clients like to know how the year went for their portfolios, and doing those meetings is the fun part of our jobs. However, the other type of reporting that we could do without is filing documents each year with the SEC and other regulators. Still, it forces us to look at our business and take stock of our progress.