Two weeks into 2022, and I’m finally ready to assess some of the market prognostications for this year and add my own outlook to the mix.

Bottom line: a lot of people think the market is “priced for perfection,” but they expect it to largely stay that way. Inflation, geopolitical risks, and pandemic disruptions be damned.

While I’m not a natural pessimist, I’m taking a very cautious approach to buying in today’s market. And I expect to see a choppy market, especially after the broad market’s big, sustained gains over the last several years.

If you see news about Russia invading Ukraine, or a monthly inflation report measure that hits double digits, I think we could get reintroduced to what a sudden bear market feels like. And inflation, if it does rise or remain elevated, could substantially increase debt service payments for the U.S. government as inflation-protected treasury bonds reprice.

Geopolitic crises might not actually affect business much, but they will create a climate of instability and uncertainty, which are poison to the the equity markets. Inflation could subside — most economists expect it to. And most economists thought housing values would never drop just as the Great Recession was blowing toward shore.

In short, risk of market downside is clearly higher than it has been in recent years.

One stumbling block for the economic growth outlook: stagnant employment levels. Without a growing workforce and increases in productivity, it will be hard to generate GDP growth.

If the consensus opinion at the moment seems to be that the broad stock markets may be up or down a little at the end of this year. I’m no futurologist, but I think the risk of a substantial downturn is higher than many market observers would like to think. But hey, market corrections create buying opportunities for investors playing the long game.

And while dividend stocks don’t usually prosper in a rising rate environment, the market currently seems to be discounting technology growth stocks in today’s rising inflation environment. Paying for the prospect of future income is less attractive if that income is expected to be in depreciated value. A current dividend is a “bird in the hand” that might not lose luster as long as rates don’t rise too appreciatively. In short, 2022 could be a year when value stocks finally score a win over growth stocks.

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