By Toby Marks, MSIE, Vice President, Chief Systems Officer & Portfolio Manager
Markets traded to record highs during the fourth quarter of 2021, fueled by accommodative central bank policy in conjunction with the promise from vaccine efficacy and continued uptake around the world. The S&P 500 index, a proxy for US Equities, ended the year up a handsome 26%, and foreign developed markets a respectable 12%. With equity markets trying to hold onto those solid gains, as of this writing, we continue to experience increased market volatility.
The volatility we are currently experiencing extends back to November. Historically, Black Friday (the day after Thanksgiving) tends to be a quiet, low volume trading day, however, 2021 Black Friday proved to be an exception. Investors began repositioning portfolios, locked in profits, and reduced risk, resulting in a broad market selloff which extended through the end of November.
Markets posted a strong rally in December. As the month progressed, the equity markets retested the highs reached in November and then rallied higher into the year-end. Yes Virginia, there is a Santa Claus. The last five trading days of a year plus the first two of the new year are identified as a “Santa Clause rally” (if it ends in a positive return). That indeed happened, only to be met with what is known as the “First Five Days” phenomenon.
The first five trading days of 2022 resulted in negative returns for all three major US equity exchanges. Throughout 2021 we commented that if the Fed ever showed signs of removing its liquidity support sooner than the markets expected, there would be a sell-off in US equites. The Fed’s policy, as identified by its recent meeting minutes, now indicates an accelerated exit from support of bond markets, setting the stage for rate hikes in 2022—possibly as early as March.
Two primary themes drove the fourth quarter and new-year volatility: the “Powell Pivot” and Covid-19 variants. The Fed transitioned from dovish to hawkish, exhibited when Chairman Jerome Powell pivoted his stance on inflation. He communicated that inflationary pressure is not just transitory, but more structural than previously suggested. Fears stemming from the spread of the Omicron variant ramped up at the close of 2021 and continue to dog global markets in the new year.
If the Fed is not forced to move too aggressively on normalizing interest rates, we remain optimistic about prospects for positive returns in 2022.
The Social Security cost-of-living adjustment (COLA) for 2022 is 5.9%, the largest increase since 1983. The COLA applies to December 2021 benefits, payable in January 2022. The amount is based on the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from Q3 of the last year a COLA was determined to Q3 of the current year (in this case, Q3 2020 to Q3 2021).
Despite these annual adjustments for inflation, a recent study found that the buying power of Social Security benefits declined by 30% from 2000 to early 2021, in part because the CPI-W is weighted more heavily toward items purchased by younger workers than by Social Security beneficiaries.
Sources: Social Security Administration, 2021; The Senior Citizens League,
August 11, 2021
The Meadowlark Holiday Classic is a cherished annual event that our Manhattan office has been doing for more years than anyone can seem to recall. For those who are not familiar with Meadowlark Hills, it is a not-for-profit senior living community recognized worldwide for its “person-centered” approach.
Typically held the second Friday after Thanksgiving, this holiday kickoff party is open to all Meadowlark residents and is one of the most anticipated events each year. The Trust Company provides a festive menu of hors d’oeuvres and beverages, which our staff help serve to the residents. At left is Arika Ryan, Receptionist, serving a glass of wine to one of our guests.
Of course, it wouldn’t be the Holiday Classic without holiday entertainment. Year after year, we are privileged to partner with the amazing trio of Linda Uthoff, Joe Braun and Thom Jackson. This year they brought along instrumentalists to enhance their lively holiday music medley. (See photo, right.) They are always fantastic!
Giving back to the communities where we do business is one of The Trust Company’s core values. Our staff are encouraged to engage in community service in support of organizations and causes that are important to them. Many of our staff members serve on local nonprofit boards or volunteer their time to important causes.
We recently shared a video of CEO Mark Knackendoffel discussing his and the company’s philosophy of giving back. You can see it on our Facebook page at
https://www.facebook.com/thetrustco or on YouTube, at
Angel Hernandez Rios
Account Administrator, Manhattan
Angel joined our Manhattan office as an Account Administrator in the fall of 2021. He was a personal banker with a local Manhattan bank before coming to The Trust Company.
Born and raised in Puerto Rico, Angel earned a bachelor’s degree in accounting and business/management at the University of Puerto Rico-Arecibo. After enlisting in the U.S. Army and serving as a bookkeeping supervisor, he obtained his MBA from the University of Mary in Bismarck, North Dakota.
A music aficionado, Angel studied classical guitar for 15 years. He named his husky-collie mix “Judy,” after the Beatles classic, “Hey Jude.” Angel sings and plays guitar at his church, in addition to spending much of his free time volunteering for church activities.
Account Administrator, Manhattan
Brady joined The Trust Company in November 2021 as Account Administrator for our Retirement Plan Services division. She assists with retirement plan enrollment and education meetings and provides support to plan participants.
A graduate of Kansas State University, Brady holds a Bachelor of Science in Management with an emphasis in general management and human resources management, and a secondary major in Gerontology. She previously served as Executive Director of a long-term care facility in Western Kansas. Brady’s recent marriage to Logan, an Agricultural Economics professor at K-State, brought her back to Manhattan.
Brady was born in San Antonio and grew up in Wichita with two brothers and four sisters. With all those kids, family vacations were always road trips—and in that spirit, she’d like to visit as many U.S. states as possible, by car. In her free time, Brady enjoys hanging out and cooking with her two siblings who currently attend K-State.
Our advisors are passionate about helping people achieve financial peace of mind. Contact us today to get the conversation started.
Contact Us Today
Sign up for our newsletter