Page 40 - Investment Advisor June 2022

Conclusions

PORTFOLIO PERSPECTIVES
By Jeff Berman

Recession Ahead? No, But Expect a Bumpy

Ride Predict Two Economists

Jeremy Siegel and Bob Doll provided market outlooks on what advisors
and their clients should expect in 2022.

to get to a neutral policy rate,” he said.
“I emphasize again that I do not see a
recession this year.”
Doll echoed these views, stating
that U.S. real growth and inflation will
remain above the trend but decline from
2021 levels. “This is a year when we’re
going to frustrate both the bulls and the
bears,” Doll said. One factor in a poten-
tial growth slowdown, he noted: 2021
was the strongest GDP year since 1984.
A “recession anytime soon is not like-
ly,” he also predicted, noting that the job
wo economists with a discern- and investors need to focus on their market is strong.
ing eye on current events pro- long-term investment plans and not However, Siegel noted, “If we do get
Tvided their insights during April get spooked by the Ukraine/Russia war one, I will remind investors: a recession
and May interviews and comments. events and global impacts to do other- impacts earnings for one year or two.”
Jeremy Siegel, senior investment strat- wise. What we can expect through the He also pointed out: “Stocks are the
egy advisor at WisdomTree and profes- rest of this year, he said, is a “tug of war present value of discounted cash flows
sor of finance at the Wharton School between earnings tailwinds and valua- long into the future. Stocks overreact
of the University of Pennsylvania, and tion headwinds,” according to Doll. negatively during these earnings draw-
Bob Doll, chief investment officer of Here are key viewpoints from these downs when less than 5% of the value
Crossmark Global Investments, weren’t two economists: of a stock would come from this year’s
always on the same page on what advi- earnings. Try to keep the long view as
sors can expect in 2022. 1. There won’t be a recession this year. you hear increasing talks of the Fed
Despite concerns about a potential Despite understanding why some are causing a recession.”
recession as the Commerce Department afraid a recession is possible this year,
reported in late April that U.S. gross Siegel said he still doubted that will 2. The S&P 500 may not experience a
domestic product unexpectedly fell at a happen. “The Fed was slow to catch deep bear market.
1.4% annualized rate in the first quarter onto inflation and they likely will then “Growth stocks continue to come under
of 2022, recession fears may be over- be forced to overreact to [it] and then be enormous pressure during earnings
blown, according to Siegel. slow to change when we do get a slow- season — as questions mount on the Adobe Stock
Likewise, Doll noted that advisors down. But at a minimum the Fed needs sustainability of earnings, supply con-

38 INVESTMENT ADVISOR JUNE 2022 | ThinkAdvisor.com