Very soon we will see the end of 2021 and the beginning of 2022 in a few hours’ time. In this post, I will share my views for the past year, my opinions of the coming year, and give an update on Bob’s portfolio.
2021 Review
As mentioned in the last preview, 2021 was still dominated by the COVID-19 narrative, with a couple more viral variants taking the spotlight; first we had the delta, and now we are going through the omicron spike. There was no global consensus on tackling the pandemic, with some places adopting a zero tolerance, some embracing an endemic approach, and others somewhere in between, but almost all agreed that vaccination is the way to go.
Despite these, the global markets and economies were experiencing a growth surge as if the pandemic had taken a back seat. Illustrating this point, the S&P 500 index had risen 27.23% year-to-date (YTD) as at 30 Dec 2021, with our local Straits Time Index grown at 9.84% YTD as at 31 Dec 2021. The quick recovery, however, had brought about a supply chain issue on a worldwide scale, with the faster-than-expected rebound of demand and the hard-to-catch-up supply side. This was seen as one of the major reasons in pushing the inflation rate up. All around, the price of items ranging from food and holiday gifts to energy (electricity, oil, etc.) are rising.
One more thing, here are the three counters which are representative of my “next big thing” (i.e., cybersecurity, electronic payments and alternative energy respectively), and see how they performed in 2021:
HACK: +7.96%1
IPAY: -12.34%1
ICLN: -24.09%1
Well, every day is not a Sunday, but do think long term.
2022 Preview
As usual (again), I would like to give a disclaimer that I really do not know what the future holds. Judging from the current trend, the inflation issue, and the (highly probable) accompanying raising of interest rates by the U.S. Federal Reserve, may dampen the growth of markets and most asset classes (see here and here for more info). There is a silver lining, though, as not all sectors/industries are adversely affected by rising interest rates, such as banks, where their profitability typically stems from the difference between lending and savings rates, and companies in the consumer staple/essentials sectors, where their products and/or services are still used, high rates or not.
The next big thing (even so it has been big for the past two or three decades), for at least the next decade, would be China. In the face of a lot of news (not all are good) and the geopolitical situation, China’s markets and economy are worth exploring due to their contrasting features; they may be autarkic in certain areas (e.g., their own technology sector), yet they are considered a major manufacturer for the world. This simultaneous independence, interdependence and dependence of markets, economy and trade, especially with U.S. and European ones, made it a good investment area to consider.
Another talking point for 2022 would be the potential hype of the metaverse. The technologies behind this concept is not new, like virtual reality, gaming, networking, etc. Yet it is the seamless mashing of these, plus the normalisation of being connected from anywhere anytime, meant that mainstream adoption of the metaverse could be possible.
Bob
As at 31 Dec 2021, Bob’s Bedokian Portfolio had grown to slightly above SGD 80,800 in value (excluding the cash component which is not shown) and gained a dividend amount of SGD 1,817.21. All asset classes (except cash) had shown healthy growth for 2020. Bob will rebalance on 3 Jan 2022 with another SGD 5,000 injection, so stay tuned to his portfolio.
Happy 2022!
Disclosure
The Bedokian is vested in HACK, IPAY and ICLN.
1 – ETFDB.com, YTD as at 30 Dec 2021 (accessed 31 Dec 2021).
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