4 Feb 2022
Business Cycles: From Tailwinds to Headwinds
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
Economists, forecasters and analysts kept telling us throughout last year that the economics for 2022 where going to be good.
The COVID-19 pandemic was going to be brought under control, supply chain was going to be restored and interest rates were going to remain low.
The reality however is that the headwinds have arrived much quicker than expected.
The pandemic is not under control, it is rampant across the World and there are not enough supply of raw materials, not enough workers, not enough containers, not enough products, not enough truckers and that has resulted in shortages and higher prices.
Will these supply shortfalls be fixed, absolutely yes but how long is the question.
The headwinds listed in the attached chart were always coming so remember what Benjamin Graham taught. Don’t speculate, instead remain invested according to your appetite for volatility and when fear and panic take hold, only then react by buying more quality assets at discounted prices.
Click for chart.
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