A Sneak Preview For 2022: Where The Market Could Go (And Opportunities To Profit)

It happens every year. Once we make our resolutions (eat healthier, exercise more), we also tend to make projections about what the year will hold.

Who wins the Super Bowl, the next election…

That’s also true when it comes to the market. In fact, longtime readers know that our research team gathers to make an entire report full of of investment predictions for the coming year.

We’ve talked about our own predictions a little bit already this year — and we’ll continue doing so. Just a few days ago, I made a prediction of my own — that the housing market would remain strong this year.

But as you know, we’re not alone in this… Analysts undertake this exercise, too, coming up with all kinds of projections and price targets for the year.

Of course, any seasoned investor will tell you, you’ve got to take these things with a grain of salt. There’s no such thing as a crystal ball when it comes to the markets. We’ve always been clear about that. But still, analysts are paid to watch their assigned companies and industries closely, so it’s worth taking a look at these projections to see if we can glean any insight.

Price Targets For 2022 — And Industries To Watch…

Let’s start with the big picture. According to FactSet, industry analysts believe the S&P 500 will rise to 5,225 over the next 12 months.

Source: FactSet

Now, we should keep in mind that this projection came out last month. And a lot can change over the course of a year — not to mention in just a couple of weeks. But at recent prices, this represents upside of more than 14%. If that’s accurate, then that means it would be another great year for investors.

While this gives us a nice number to pin on the board, we need to look deeper. If the first few weeks to this year are any guide so far, it’s becoming clear that prospect of rising interest rates are creating a full-throttled rotation. Currently, as my colleague Nathan Slaughter recently pointed out, the tech sector is out, while more value-oriented sectors are in.

Thankfully, this price target for the S&P 500 comes from a bottom-up analysis of projections from sector analysts. It was calculated by taking the median price estimates from analysts at the company level, then aggregating by sector, in turn giving us an overall price target.

Below, you can see a sector-by-sector breakdown, showing which areas of the market may offer the most upside…

Source: FactSet

Looking at the chart above, we can see that the Communication Services (+22.0%) and Energy (+19.2%) sectors are expected to offer the most upside based on the difference between target price and closing price. On the flip side, Utilities (+6.2%) and Real Estate (+8.0%) are expected to offer the smallest upside.

As you look to rebalance your portfolio and look for new areas of opportunity, keep this analysis in mind. While last year was fantastic for most investors, nothing is guaranteed going forward. But these sectors could offer some fertile hunting grounds this year.

In fact, if you’re looking for opportunities for major profits in the energy sector, then you need to check out the latest from Nathan Slaughter…

He’s predicting we’ll see the “mother of all oil booms” in 2022 — thanks to the latest monster find in the Permian basin. And it could unleash a wave of deals in this sector that could give investors the opportunity for incredible gains…

In Nathan’s latest report, he explain what’s happening — and how you can get in now before the rumor mill picks up, potentially giving you the chance to pocket triple-digit gains, overnight. Go here now to learn more.