Happy Holidays, and yes, it is December ALREADY! We wish nothing but the best for you all as 2021 winds down to a close. It has been an interesting year in terms of the markets, and we want to give you a bit of an update leading into the final month of the year. Here is our December 2021 Market Update.
Flashback of 2021 to Year-End
- Inflation: The biggest item we hear about is inflation concerns, supply chain issues, and labor shortages. Again, all of this was predicted towards the end of last year by Fed officials and economists. Strong demand and supply chain disruption will allow the market to correct itself, maybe not on everything, but on most things. We don’t think it is worth panicking over at this point. The best advice we have is to make sure your nest egg isn’t sitting in a bank somewhere, losing value. It is always better to have your money invested and making money for you, especially at current interest rates.
- COVID-19 – The saga continues: This time, with the Omicron strain of COVID-19. While this strain is said to potentially be more spreadable and vaccine-resistant, it doesn’t seem to have the same potency that the delta variant did. This news is still young and is something to monitor in December. The main takeaway here is that COVID-19 is not going anywhere anytime soon.
- Crypto continues to shock the naysayers: Bitcoin has almost doubled in value year to date, with other cryptocurrencies such as Ethereum appreciating by almost 500%. There is also a market now for NFT’s (non-fungible tokens), which are essentially digital collectibles. Crypto will have a number of peaks and troughs and is very volatile, but if you want to get in, there are still opportunities. We think having a constructive mindset and a good strategy is the way to ride out market madness, especially when in volatile investments.
- What about the market?: After a tumultuous 2020, the markets have managed to rebound strongly in 2021. Year to date, the S&P 500 is up 25.23%. If the year were to end today, that would be the third-highest return on the S&P in the last decade. The energy and financial sectors led the way this year, but we don’t foresee that as a continuing trend. We believe that the narrowing of the gap between last year’s winners and this year’s winners is setting us up nicely for 2022.
Looking Forward to 2022
Next year really excites us! We have a lot to look at for 2022 as the effects of COVID-19, both social and economic, are still making their way across the globe. As these unfold, we will be keeping everyone apprised of the updates, how they will affect you, your money, your plans, and your conversations. We urge you to stay on the lookout for these future commentaries so that you can stay updated on the state of the financial markets as we head towards the new year.
We will also be putting together another webinar to go over our 2022 Outlook, which we will have together by the end of the month, with the “go live” date in January!
Have a great holiday season and speak with you soon!
Green Ridge Wealth Planning Team