2022 is here. Let's talk about what to expect, trends/themes to watch, and overall market and economic outlook.
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SCRIPT
I am not an expert, a financial analyst, a broker or an economist. But I am an investor and manage my portfolio. I have made investments across different asset classes and I like to stay on top of what’s happening around me. So here is my take on 2022.
Let’s rewind 2021 - Just when we thought we have our hands around the virus and can dump those smelly masks, a variant hit us, then another and look like masks will stay around for just a little bit longer. But that didn’t stop the US consumers from blowing their hard earned money. Consumer spending drives 70% of overall U.S. GDP. Apparently, holiday sales were up 8.5%. With all that demand, limited supply and crazy amount of money to blow, Inflation shot up at its fastest pace since 1982. Meme stock mania continues but is trending down, as the reality kicks in. SPAC tsunami paused as investors realized it rewarded the sponsors handsomely but came with immense speculation and limited upside for the little guys like us. Bitcoin and Ethereum made new highs then gave back 50% and now some what stabilizing for the next leg up. Apparently, NFTs are here to stay. At least for now. In 2021, NFTs saw a notable rise but investors continue to be divided. Digital world is the future. At least that’s what Mark Zuckerburg wants us to believe. He introduced ‘The Metaverse’. China cracked down some of the largest companies in the tech and education space. Stocks markets was up more than 25%. Ark ETFs are down big for 2021.
Trends for 2022 - Economic Recovery, Inflation and Interest Rates - High Inflation should persist, at least in the first half of the year. Interest rates will make headline. Metaverse - Mark Zuckrburg wants us to believe Metaverse is the next evolution of the internet and how we interact socially. Blockchain/Crypto/NFT - In 2021, both Bitcoin and Ethereum made new highs before giving some up. Feels like these two are forming some sort of a base for the next leg up in 2022 . With the rise of decentralized finance apps or (DeFi), Metaverse, NFTs, virtual worlds, adoption by institutions and celebrities, cryptos will see the next push higher. All things Digital - The companies are investing in technologies to modernize their businesses through automation, online experiences, payment solutions, machine learning, and artificial intelligence. In 2022, this trend will continue and companies enabling the transformation will do fine. Cybersecurity - Every other week we hear about a security breach or a wide spread cyber attack. Not just for 2022 but this theme is going to dominate for a while. Sustainability - Get this, more than 200 global organizations have committed to achieving Net-Zero Carbon by 2040 or sooner. As an investor this means opportunity. Think clean technologies such as carbon capture, solar and wind, battery storage, renewable energy sources and energy efficiency. Electric Vehicles - Lets talk EVs a bit more. At some point, the world will agree, EVs are the future and Tesla is leading the way. With rising oil prices and cost efficiency on battery product, EV ownership is on a rise. Real Estate - Real Estate was hot for 2021. This trend will continue. Naysayers argue that interest rate hike will put a break but with limited supply, raising wages, healthy job market and a recovering economy, think twice before you bet against Real Estate. ‘Cathie Stocks’ - My bet is, for 2022, hyper growth companies will come back with a bang. But I would wait till we see some positive price action. Healthcare - XLV, the healthcare ETF is at all time high and is one of the best performing sector for 2021. For 2022, this may continue but I am neutral. Energy - Energy had a blow out 2021. Most smart people agree that this will continue into 2022.
DISCLAIMER - I am not a Financial Adviser or Tax Professional, the information provided is my personal opinion and should not be considered professional advice.
#thinkfinance #2022trends #2022outlook
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