I spent the last 2 weeks thinking about what to say on this topic, while catching up with school activities after the Holiday break. Fencing( my passion!) certainly consumed a lot of my leftover time after the homework and pop test schedules at school.
Looking at the roller coaster volatility in the market and and what is causing it, I am willing to make my bold prediction about 2022!. Unfortunately I believe that 2022 will more of the same we saw in 2021. There may be a little bit of lesser volatility, but not much different. Certainly nothing like what the hosts on CNBC are predicting. I like them and many are super smart, but I will have to disagree with them on this.
So….I am in the …“market will be bearish in 22” camp.
The federal reserve announced that there will be interest rate hikes and so when they happen the market will see some “rates shocks”. 2021 was mostly an year of inflation and due to the interest rate hikes, inflation will be curtailed to certain extent My strong recommendation to readers is to preserve your capital in 2022 as it may come handy. The federal interest rate policy will bring the stock prices down of companies that have been overpriced and frothy in 2021. While this will be mostly seen among tech stocks, I also see this correction occurring in the stock prices of a few retail consumer focused companies
Another trend I predict in 2022 is that the market will become a bit “Covid numb”. After more than 28 month of the markets overreacting to any and every Covid news, I expect the market has built some confidence about the economies ability to withstand bad or scary Covid related news.
I am very bullish about Crypto too. I think crypto based assets are gaining retail confidence as a “will not go away” category. So keep a watch out for Bitcoin and Ethereum.
Stay tuned for my next blog. I will make a few detailed predictions about 3 of my favorite market catagories and companies
Yours…..Shreya