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A Perspective on the Year for Investors

The Omicron COVID-19 variant has reminded us—at least briefly—that share prices can go down as well as up. It all started the day after Thanksgiving, when the Dow Jones Industrial Average had its worst trading session of the year, plunging more than 900 points, or 2.5%.1

That wake-up call perhaps wasn’t such a terrible thing, especially in a year when the stock market has been remarkably placid, lulling investors into complacency and no doubt seducing some into investing more aggressively than they should.

Still, even as we’re reminded that stocks can have horrible days, I’d argue that what we really need is a far more important reminder—that such short-term losses should be the least of our concerns. The fact is, investment risk takes many forms. Forget the latest twitch in the Dow industrials. Here are five far bigger risks, all of which reared their ugly heads in 2021.

Risk #1: Escalating Inflation

Who knew