The growth can be attributed to three factors: increasing accessibility, affordability and awareness of advice, said Brian Concannon, head of Digital Advisor at Vanguard, the investment giant’s robo adviser. “In general around the robo-advisory industry, the future is looking bright,” he said. “There is healthy competition throughout the space and over the last few years we have seen the quality of this industry rise year after year while fees are compressing.” 

About 3.5 million investors will have used a robo-adviser for their investment needs in 2021, up 23.2% from 2020, when there was a record growth of 37.4%, according to eMarketer. The growth rate is expected to stay in the double digits for at least the next two years, which means more than 5 million investors will be using these platforms by 2025. 

Robo-advisers are not used solely to invest for retirement — people invest for education, homes and even cars — but they can certainly assist in the journey to a comfortable retirement. They can’t take the place of human financial planners, who can gauge emotional responses to market volatility and know to ask more comprehensive questions, such as about estate and tax plans. 

Here’s what we can expect to see from robo-advisers in 2022: 

More state-based help 

Not all Americans have access to employer-sponsored retirement plans, which allow workers to defer a portion of their paychecks into a retirement account in a tax-advantageous manner. States are responding to this lack of accessibility by creating their own state-sponsored retirement plans, using automated investment services that offer individual retirement accounts in a similar manner to employer-sponsored plans. These programs are particularly helpful to small businesses, many of which do not offer plans because of affordability or complexity. This space is expected to continue to grow into the new year, said Edward Gottfried, product manager for Betterment for Business, the retirement plan arm of the online investment firm. 

Value-based investing 

Some institutions, as well as the government, have emphasized the importance of ESG investing, short for environmental, social and governance investing. That will likely continue to grow in 2022 as well, Kristen Carlisle, general manager of Betterment for Business, said during a Barron’s Live event on robo-advisers and retirement planning. 

Earlier this year, the Department of Labor proposed broadening the investment options in retirement accounts to allow for ESG options, a nod to its growing popularity.  

More attention to personal finances 

The pandemic shed light on just how crucial financial planning is for every individual, especially those with little saved for retirement or emergencies. Leaning into one’s own finances is a trend that is expected to continue into the new year — especially as uncertainty swirls around COVID-19, newly discovered variants and local and federal governments respond to this health crisis. 

Younger Americans are jumping in to the space as well. This is good news, since they can take advantage of compound interest, which will allow their contributions and returns to grow over time. The bad news, however, is some young investors are dabbling in speculative, volatile trading fads. 

“We know stock-picking is hard enough for money managers,” Concannon said. “We view it as some people learn painful lessons, but you go back to the good news side of this story and these investors are young.” One example: the Reddit-fueled push for Gamestop stock trades earlier this year. It’s better to become acquainted with investing and make some mistakes at 26 years old than 62 years old, “when they have decades to get back on track,” he added. 

Demand for more benefits 

Along with 401(k) plans and employer matches, workers want more help with their finances, and employres are finding ways to answer those wishes. That will continue in 2022, Carlisle said. Employers are responding to this desire by providing financial counseling or benefits tied to student debt relief. While this may not be the same as contributing money into a retirement plan, having an understanding of the big picture of one’s personal finances allows them to free up cash they can then save for the future, or get them on a clear path to retirement security later in life.

Read: Inflation swells to 39-year high in November

“Their eyes are wide open right now for sure,” Shapiro said.

The critical point, Shapiro said is that so far inflation has been a story about goods prices.

But it looks like inflation is getting set to jump the rails to the service sector where labor costs make up the bulk of prices. If labor costs accelerate given the recent spike in inflation, the Fed will be facing “a very uncomfortable situation,” he said.

For years and years, labor costs have been under an “iron grip” but the pandemic has turned this on its head, he said.

In face of these new risks, the Fed will begin a journey next week toward a more neutral policy stance.

The Fed has been running super easy monetary policy, buying billions of dollars in bonds each month under a quantitative easing policy. Next Wednesday, the Fed is expected to double the pace of “tapering” of its asset purchases so that the program ends in March, a few months sooner than had been planned.

Fed officials will issue a policy statement next Wednesday along with new economic projections at 2 p.m. on Wednesday. Fed Chairman Jerome Powell will follow with a press conference at 2:30 p.m.

The unspoken message is that the Fed will be prepared to start raising interest rates sooner too, Shapiro said.

“I think they’re going to start doing 25 basis points rate hikes per meeting in the second quarter,

“It makes no sense to have interest rates where they are right now – both on the price front and on growth – zero sense, and they’ve kept them for too long to begin with,” Shapiro said.

David Wilcox, a former top Fed staffer and now a fellow at the Peterson Institute for International Economics, said it was important to view Fed policy as a thermostat with many settings rather than a simple on-off switch.

So next week, the Fed will be turning the dial towards less accommodative policy stance.

They will do that by penciling in a sooner “liftoff” of interest rates and a faster trajectory over the next three years than in September.

“What they are doing is not bringing to a halt the support they are providing for the economy. They are just turning back the dial some,” Wilcox said in an interview. In addition to continued asset purchases until March, the very size of the Fed’s balance sheet as a result of the purchases gives the economy a boost, he argued.

In September, the Fed’s dot-plot forecast of interest rates penciled in only one rate hike next year. The projections showed a gradual hike in the fed funds rate to only 1.8% at the end of 2024.

That’s below the 2.5% fed funds rate that the Fed believes is “neutral,” neither slowing down the economy or spurring growth.

Wilcox said it was plausible that the updated dot-plot will show the Fed hitting neutral by the end of 2024.

Yields on U.S. government debt
TMUBMUSD10Y,
1.453%
were mostly lower Friday morning, despite the consumer inflation reading that came in at its hottest rate on an annual basis in almost 40 years.

Now here’s the good news: if you wait to claim until you reach your full retirement age (currently 66 and two months and will increase to 67 for those born in 1960 or later), retroactive benefits can ease the pain if you change your mind, as Jeffrey Levine explains.

Related: The best reason of all to postpone retirement

Dividend stocks for 2022

It’s possible that 2022 will be a difficult year for the stock market as the Federal Reserve allows interest rates to rise. A stream of dividend income can it easier to stay put during a down market. Here’s a list of stocks with dividend yields of at least 3% and plenty of expected cash flow to cover higher payouts.

Where to retire in the Midwest

Silvia Ascarelli writes the Where Should I Retire column. This week she helps a woman who wishes to move out of Illinois, but not too far from her family in the suburbs of Chicago. Here are three possible locations based on her criteria.

Try MarketWatch’s retirement location tool for your own custom search. It includes data for more than 3,000 U.S. counties and incorporates climate risk.

A stock-picking strategy you may never have thought of

Professional money managers have many ways of selecting investments, some of which are based on sophisticated mathematical models. But Fred Reichheld outlines a much simpler method that has served him well, with a portfolio that beat the Vanguard Total Stock Market ETF by 2.8 to 1 over a 10-year period.  

ETFs go meta

Mark DeCambre writes the ETF Wrap column, with news and performance updates for exchange-traded funds. This week he shares a fascinating industry development, as ETF managers rush to create metaverse investment products in the wake of Facebook’s name change to Meta Platforms Inc.

You can sign up here to receive ETF Wrap by email.

Bitcoin and blockchain

Mark DeCambre fills in for Frances Yue for this week’s Distributed Ledger column, which includes a warning for bitcoin holders.

 Sign up here to get Distributed Ledger delivered to your inbox weekly.

Related: Stocks will face competition from blockchain-based DAOs in the near future

The SEC’s conflict with China and what it might mean for U.S. investors

Mark Hulbert explains why a possible clampdown by the Securities and Exchange Commission on the U.S. listing of shares of Chinese companies might backfire for U.S. investors.

More from Hulbert:

• It’s a good bet that Apple, Amazon and other Big Tech darlings won’t be the 2020s’ big market winners

• Twitter made this shareholder-friendly move after Jack Dorsey resigned as CEO. Here’s why it just might work.

Digging further into the supply shortage

You have no doubt seen coverage of long delays for ships that need to unload freight in U.S. ports, but Katie Marriner and William Watts describe a related problem that may surprise you.

When is enough enough?

CD Moriarty offers some blunt talk to a couple well-positioned for early retirement but who fear they don’t have enough: “Retiring is more like planning a career than building a nest egg alone.“

Want more from MarketWatch? Sign up for this and other newsletters, and get the latest news, personal finance and investing advice.

See: U.S. inflation rate swells to 39-year high of 6.8%. Americans paying higher prices for almost everything

Inflation is proving to be a persistent political challenge for the White House and congressional Democrats, who are facing tough midterm elections next year. President Joe Biden’s party argued before the data was released that it’s backward looking and doesn’t capture some improvements in prices in the last few weeks. Still, that didn’t stop the GOP from piling on, sharpening attacks as they eye gains in Congress.

“Prices keep rising and all Democrats want to do is spend trillions more in taxpayer money. Democrats created the inflation crisis crushing American families and are too incompetent to fix it,” said Michael McAdams, National Republican Congressional Committee communications director.

The White House, meanwhile, is promoting Biden’s Build Back Better proposal as helping ease costs for Americans, as the plan remains under intense debate in Congress.

“The challenge of prices underscores the importance that Congress move without delay to pass my Build Back Better plan, which lowers how much families pay for health care, prescription drugs, child care, and more,” President Joe Biden said in a statement.

The U.S. Chamber of Commerce is calling for a pause on that same bill, saying it will just stoke more inflation.

“Year-on-year CPI inflation is at its highest in almost 40 years for the headline index and over 30 years for the core index,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez, Inc. “This is certainly complicating Biden administration efforts to enact enormous social spending legislation, and fairly or not, is weighing on public opinion regarding the competence of Democratic Party management of the economy.”

The House Progressive Caucus also argued that Build Back Better will lower costs for families, and urged its passage, as did House Speaker Nancy Pelosi, a California Democrat.

“The Build Back Better Act is the most significant cost-cutting and inflation-fighting measure in recent history — taking concrete action to lower everyday costs, slash middle-class taxes and put more money in working families’ pockets,” House Speaker Nancy Pelosi said.

With little science to go on right now, there has been a wide range of responses to the few details we have so far about omicron.

Pfizer CEO Albert Bourla this week said a fourth dose of its COVID-19 vaccine could be needed, within a year of getting the third shot. A headline in The Atlantic says “The pandemic of the vaccinated is here.” And this is why health officials continue to push people who are fully vaccinated to get a booster shot of any COVID-19 vaccine. (Teens who are 16 and 17 years old can now get BioNTech
BNTX,
-8.38%
and Pfizer’s
PFE,
+0.85%
booster.)

“Although we don’t have all the answers on the omicron variant, initial data suggests that COVID-19 boosters help broaden and strengthen the protection against omicron and other variants,” Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention, said in a statement on Thursday.

Vaccines and natural infection can create immunity through different avenues, including T-cells and antibodies. The worry has been that omicron might be able to evade these protective antibodies.

However, new research says that people who have generated a T-cell response through COVID-19 vaccination or infection may still be protected against omicron, though it’s unclear to what degree, according to a new preprint, which is preliminary medical research that has not been peer-reviewed.

“SARS-CoV-2 has not evolved extensive T-cell escape mutations at this time,” concluded the study’s authors, who include scientists at the National Institute of Allergy and Infectious Diseases and Johns Hopkins Medicine. 

(“Good news,” tweeted Dr. Isaac Bogoch, a University of Toronto infectious diseases physician.)

And if existing vaccines, including boosters, can hold up against omicron, that may mean we won’t need a variant-specific COVID-19 vaccine.

“If you look at protection against variants, it appears to relate to the level of immunity and the breadth of the immunity that any given vaccine can instill on you,” Dr. Anthony Fauci, the president’s chief medical advisor, said in an interview with STAT.

Here’s what else you should know about COVID-19 

Ten percent of Americans believe that the COVID-19 vaccines conflict with their religious beliefs, according to a NPR story about a new survey from the Public Religion Research Institute and the Interfaith Youth Core. 

About 50 million in the U.S. who have been sick with COVID-19 still have persistent symptoms, including severe fatigue, in cases that are known as long COVID, according to The Washington Post. Some have to quit their jobs, others are racking up debt, and experts estimate that between 750,000 to 1.3 million people can no longer work full time. 

The latest COVID-19 numbers

The daily average case count in the U.S. was 119,788 on Thursday, down from 121,311 on Wednesday, but overall the case count was still up 30% from two weeks ago, according to the New York Times tracker. The daily average death toll was 1,281 on Thursday, compared with 1,275 on Wednesday, and is up 18% from two weeks ago. Hospitalizations increased to a two-month high of 62,971.

The number of fully vaccinated people in the U.S. rose to 200.7 million, or 60.5% of the population, according to data from the Centers for Disease Control and Prevention, while the number of people receiving booster shots rose to 49.9 million, or 24.9% of the population.

The number of new cases in South Africa continues to sharply rise, with 22,391 new cases on Thursday, according to the National Institute for Communicable Diseases there. Only 22 deaths were reported on Thursday.  

Recent readings of consumer attitudes toward the economy have shown them to be more pessimistic that at any point in the past decade, with rising inflation being the prime driver of negative sentiment.

U.S. stocks
SPX,
+0.65%

DJIA,
+0.51%
were moving higher ahead of the report.

But no Barefoot Wine, the top-selling purveyor of budget vino (its bottles are generally $6 to $10), has partnered with Nabisco’s beloved brand of Oreo cookies
MDLZ,
+0.18%
— specifically, the Thins kind — to create a sip that tries to cover both bases. As the bottle’s label says, “Name a better duo than red wine & chocolate.”

This is obviously as much about marketing as wine-making. To wit: The bottle was a limited-edition offering and sold out in one day earlier this week (don’t worry — we secured a sample before then). But it does seemingly speak to the Barefoot ethos, or as the company’s longtime winemaker Jen Wall said in a statement: “Barefoot Wine is a brand that stands for fun, flavor, and expressiveness — all values that Oreo Thins upholds as well.” Meanwhile, the Oreo team is using the wine to position its Thins line as a more sophisticated, adult-style version of the cookie we all dunked in milk as kids. “Oreo Thins cookies have always been the perfect Oreo cookie for adults — so we are excited to showcase a new grown-up pairing with Barefoot Wine,” said Oreo Thins brand manager Sydney Kranzmann in a statement.

Barefoot, a label whose roots go back to the ‘60s and is now part of the E. and J. Gallo wine portfolio, didn’t provide many details about what goes into the Oreo wine. The label simply identifies it as a “grape wine with natural flavors” and notes the wine’s “jammy dark fruit aromas” and its “flavors of chocolate, hints of blackberry and dark cherries and smooth lingering finish.”

What we think about it

Blech! This is a tough sip to swallow — there’s something unnatural, unseemly and just plain unappetizing about a wine that’s like a liquid version of those cheap chocolate-covered cherries you buy by the box at a post-Valentine’s Day drugstore discount-bin sale. The only salvation comes in the form of those Oreo Thins, a delectable version of the classic cookie that does actually make sense with this — the chocolate in the cookie seems to nullify some of the wine’s sheer weirdness. Or maybe we like Oreos so much they made us forget about the bottle.

How to enjoy it

In short, don’t even bother trying it (and as we said, the bottle is already sold out, though perhaps it will end up in some kind of alternate-universe wine auction). If you’re really a fan of Barefoot, just get a bottle of one of its many affordable wines — we sorta liked one of the label’s sparkling offerings years ago — and let it go at that. Or just stick with the cookies.