My longtime editor and friend, Evan Simonoff of FA asked me for a review of 2022.

Two words – “good riddance”. And I’m pretty sure I’m not alone.

My professional view has certainly been impacted by personal issues including Hurricane Ian, who left my 88 year old mother homeless despite an otherwise air-tight retirement plan. And I’m absolutely certain that anyone hating 2022 also has personal reasons. Isn’t that the COVID lesson – that work and home and family are integrated??

So with apologies to the strict business types, my Year in Review 2022 is a mixed bag of observations, potential trends, and lamentable realities. I want to acknowledge good works but they are currently overpowered by forces our industry continues to resist. We love the bull market fueled results – but that rising tide may have peaked. Time to plan accordingly. For good measure, I’ve made a list of 13. Lucky 13 – take that 2022.

  1. Inflation – OMG – okay, so I am starting with the most important one. Ken Dychtwald’s retirement research shows clients picked inflation as the runaway #1 worry. Significant because healthcare had dominated these surveys for years with no real challengers. But then again, inflation has been dormant. This is not historical reality, which is one reason why it is said of history that ignorance of its teachings leads to repeating the mistakes. As an industry sage, I am able to remember my first year in the markets as an intern when TBills were 15%. No typo here. The CPI took back 13.5% No typo there. $1 million nest egg paid you $150,000 risk free, state tax free, and with a modest real return. After Fed Chairman Volcker slayed the inflation dragon – my first year as an investment manager – 1982 – the asset class winner was the long 30 year Tbond at 52% total return. No typo there. But some great memories….The drivers of the New Inflation are here to stay for awhile – it’s not all monetary policy, which is now totally hackable by any hedge fund anyway. Structural issues will take years to resolve. Expect more trouble ahead.
  2. Airlines are not the same. For my travel money, Delta has its act together and it matters. Newbie on the block, Avelo, has made it easier to get to Baby Boomer retirement hot spots and most every plane is full. Some growing pains but keep going!
  3. We are not alone – the globalization of bad things. Marsh McLennan’s no nonsense ceo, Dan Glaser, said it well. On stage at the EY Insurance Executive Leadership Summit in May, he observed, “Who knew we’d have to factor in thermonuclear war as a business risk?” Most Americans have long lived the delusion we have no real enemies beyond our borders. But even the most isolationist Red Stater has learned about global interdependency when trying to fix a truck or tractor dependent on a Taiwanese microchip. Don’t get me started on gas prices. Or that we need baby formula and find out where it’s made – or not made. Information theft and other non-US based electronic invasions impacted countless schools and utilities and ordinary businesses. No one is alone – or safe – there is no way off this grid. Best to plan for the worst.
  4. There is no reason to drink bad wine. I wanted to hate the Vivino app and WSJ Wine but I love them both. Convenience, convenience, convenience. And both get you good stuff for good prices. I never thought I’d drink a no-name something from a publishing company – and like it. Go with this flow. Pun intended.
  5. Sneakers with business suits is wrong on many levels. As are white soled dark shoes. Attention men, Larry Fink wears jeans and a sport coat and looks normal. Don’t mix mediums. Wearing hats on Zoom is ok – but only if you have a company lid or are undergoing dermatologist-directed treatment for skin issues (me). And COVID beards should all be evaluated by people other than us. Listen to them.
  6. Most retirement planning is a fraud. The most important determinants of a solid plan require conjecture – best guesses. How long will you live? What will your health be? What will markets and rates and inflation do to you? Single scenario retirement planning is just malpractice. Advisors I’ve interviewed say you do the plan based on best guesses and then again with the potential train wrecks. It’s like flying, one said, you arrive at the airport, hopeful for your vacation – and the flight is cancelled. Now what? Plan for Plan B – and Plan C and Plan D…..Ask my mother, who at 88 was modestly covered for everything. Until she was homeless. Anyone think of that? She did own a share in a CCRC (please know what that is BTW) to ensure availability of long term care. Thank goodness – she will go there. Many many many others not so lucky.
  7. Mother Nature is one pissed off lady. My mom and her neighbors were blown up by Ian. Much of the West is besieged by wildfires. Atlanta is colder than NYC. Heat waves and drought have compromised our farms. Historic flooding in places you don’t think of as having too much water. And we will never be rid of lethal viruses – 290 of which killed humans last year. I don’t care what your politics are, we need to be aware and better prepared for threats created by this rogue. She’s mad at something – and i suspect trying to send us a message to take seriously the threats to our planet that are growing and will not ever retreat.
  8. I thought Top Gun Maverick would be disappointing. I was so wrong. So is the decision to see it on your mobile device. Must see big screen.
  9. Retirement is about protecting, not investing. Hanging on for dear life as the markets retreat, financial advisors have to accept investments as a means to an end and not the Main Event. A flash poll of advisors conducted early in 2022 by FA found that when seeking to “reduce risk” for clients, 85% looked to the portfolio asset allocation. A Ken Dychtwald/Age Wave finding this year says that more than half our clients think that “multiple” financial products are needed to address retirement funding needs. Very few people have enough money to make it through retirement. There is leverage for those limited funds in protection strategies using insurance capabilities. Get over the stigma. – the clients don’t share it. And watch for more products that provide more assured outcomes like LifePath Paycheck from BlackRock.
  10. Those Baby Boomers are still driving the gravy train. Sick of hearing about them you may be but they have 76% of the assets and own the most products that pay. Note that when the bull market last bottomed in 2009, their median age was only 53. Now it’s 66 and with that age comes a very different list of priorities. Refresh every client like it’s 2009. What now?
  11. Comfort is in for good. Casual business clothes may be the best innovation in history. Stretchy material hides some of that Zoom-belly, and we can travel and commute and spill stuff…LuLu – we love you – along with Alphalete, Rawgear, BYLT, Hoka shoes – many of which were born in the pandemic. I’m never giving up my Hermes ties or scarves but there is a new, more breathable world out there!
  12. Hybrid work is here to stay but you better master it quick. WFM is a godsend for time starved commuters, self motivated stars, employees with family care needs and geographically dispersed teams. And even there risks abound. Productivity is dropping in many firms dependent on collaboration and internal social networks – or that depend on engaged customer service. From a “future view”, I don’t know how younger employees get coached and grow without the leaders engaged. I don’t think you can pay people to care and I don’t think we have to employ people who don’t.
  13. Connectivity is productivity. Common to all nine items on the list above is that success is based on an ecosystem of delivery. Sole practitioners, individual contributors cannot achieve results in a complex world. Whether we are talking about wine, retirement planning or supportive shoes, all need the combination of accurate data driving better allocations of manufacturing resources measured for higher quality and delivered by empathetic distribution. Connectivity is created by leaders whose humility permits them to learn continuously and make adjustments. WSJ Wine is more of a distribution and customer service wonder than a product masterpiece. We know these are winery overruns. But who cares? If an employee proves they can be productive at home, who cares? Look at the end product or service as the primary guide and make your real work the seamless connectivity of the ecosystem. Too often we try to solve for one of the parts and cramp the rest of the system. Solving for WFM is backward. Find out if your product or service delivery can be supported by at-home workers and avoid the coming managerial crisis in evaluating at-home people vs on-site people. Is that really where we want to invest our time?