After enjoying a spectacular stock market run this past year, Canadian investors should be prepared for “muted” returns in 2022 as central banks end the stimulus gravy train, experts say.“We expect a more challenging environment for equities going forward after what’s been a fairly impressive rally in 2021,” said the portfolio manager for Fiera Capital.
And bonds, long seen as key to a balanced portfolio, are no longer viewed as a guaranteed good return. “Valuations are generally more reasonable here in Canada,” Riach said during an online event unveiling Franklin Templeton’s outlook for 2022. “Lower valuations tend to indicate higher return potential over the longer term.”
He said opportunities in the next phase of the market cycle will come from high-quality companies that trade at reasonable valuations and can provide some protection from downside risk should there be a larger pullback.