Goldman Sachs Predicts Over 60% Rally for These 3 Stocks

Goldman Sachs Predicts Over 60% Rally for These 3 Stocks

The key to investment success in 2022 is likely to be diversity; that is, a broad range of portfolio allocations that spread investment money across multiple sectors. In short, don’t put all of your eggs into one basket. Last year saw tremendous gains – some 29% on the S&P 500 – fueled by better-than-expected earnings. The rebound from the short, sharp 2020 COVID recession was real, but may have also given investors a distorted picture of the markets.

For starters, the supply chain disruptions of the past year had the unanticipated effect of supporting earnings. With production facing bottlenecks, and distribution facing delays, retailers had less incentive to offer discounts – resulting in strong profits. That effect is not sustainable going forward.

We’re also in an inflationary environment. A modest rate of inflation, higher than the Fed’s 2% target and up to about 4%, tends to support stocks – but by the end of 2021, we were seeing inflation rates rising above 6%. At that level, it starts to sap everything, and if the Fed fights back with higher interest rates, expect stocks to slow down.