Stocks, bonds and cryptocurrencies in 2021
By Morf Morford
Tacoma Daily Index
If your finances in 2021 have exploded, imploded, reversed, convoluted and introverted, you are in good company.
Personally and professionally, in businesses and bank accounts large and small, money and markets seemed to have a mind of their own in 2021.
Investments, even everyday products, have exploded in value – some like GameStop, even holding it for a while.
Others, like a certain category of Dr. Seuss’ books, rose in value stratospherically and then, just as quickly, returned to semi-relevant market value.
Our much-vaunted supply chain problems have reverberated throughout our economy in ways many of us never imagined.
Inflation, in some categories, emerged as a threat that many of us had never seen before.
Was inflation, or part of that price madness, temporary or has the market valuation / devaluation reached a pace and range that matches the convulsions of weather systems around the world? Or through the windows of our living room?
The stock market is not the economy, but what is it?
As I mentioned at the start, for better or for worse, you are not alone if your finances have been a roller coaster of a lifetime in just one year.
Here’s a look at some of the 2021 headliners.
There are a few familiar categories here.
And some obvious winners (and losers).
Any of us would have known that real estate would be a massive winner in 2021, but who would have imagined that crude oil would rise more than 50%?
Or that gold would fall by almost 4%?
A guiding principle of investing was previously “invest in what you know”.
In 2021, the best investment strategy might have been “Invest in the craziest asset you’ve ever heard of” – but NOT in Theranos.
Asset class Yield 2021 Asset type
Bitcoin 59.8% Cryptocurrency
WTI crude oil 56.4%
S&P GSCI 37.1% Raw material
Dow Jones Real Estate Index 35.1% Real Estate
S&P 500 Shares 26.9%
S & P / TSX Composite 21.7% Equities
Russell 2000 13.7% Equities
MSCI EAEO shares 7.8%
US dollar 6.4% Currency
Bloomberg US Treasury Index -2.5% Bonds
Gold -3.6% Raw material
MSCI Emerging Markets -5.5% Equities
Silver -11.7% Raw material
And, as any recent trip to a grocery store would reveal, farm and livestock feed prices have risen alongside the Dow Jones real estate index (35.1%).
Show me the money
And if you thought the financial world of solid things like gold and silver and oil and real estate was a bit of a mess, take a look at global currencies.
The US dollar, despite record inflation, rose in relative value by nearly 6.5%. It was followed by the Chinese yuan which rose about 2.7%.
The British pound fell just over 1% – although thanks to Brexit most financial watchers expect more (even a lot more) to fall in value.
To add to the excitement, the euro fell 7%.
If you could afford it, or if you could maneuver the continuously choppy terrain of COVID mandates, requirements and restrictions, I would say now is the best time to take a trip to Europe.
Or maybe not.
And don’t even think about taking a cruise.
The Japanese Yen has fallen over 10% which is terrible – unless you know someone whose savings are held in Turkish Lira – the Turkish currency has fallen 44%.
Especially in the last weeks of 2021.
Closer to home, the Mexican peso fell just over 3%.
If you’re up for an adventure, it might be time to plan your Mexico vacation.
Not surprisingly, energy across the board has grown by almost 50% nationwide – although some lucky areas have seen increases approaching 100%.
Real estate grew by over 42% and consumer staples by over 15%.
With the growth of working from home, the tech industry had to expand – IT as a whole grew 33.4% and continued to deliver strong returns, Microsoft (51.2%) overtaking many other tech giants.
Peloton (-76.4%) was a big loser in 2021.
Who needs money when you have cryptocurrencies?
Cryptocurrencies had a stellar year beyond Bitcoin (59.8%), which itself was outperformed by many other upstart cryptocurrencies and innovative contract platforms like Ethereum (398.3%) , Solana (11,177.8%), Avalanche (3,334.8%) and Luna (12,967.3%).
While Tesla had a great year (49.8%) (except for the recall of half a million vehicles), nothing could come close to Apple (33.8%) as it became the first U.S. company to achieve a market capitalization of $ 3 trillion at the opening of 2022.
Yes, 2021 has been a year financially.
In a market where Dr. Suess’ books, GameStop stocks, and digital currencies you’ve never heard of were the hottest investment vehicles, you know we’re ready for another financial mad rush in 2022. .
If you can bear even more thoroughness over the fine print that made 2021 so financially adventurous, take a look here: https://www.visualcapitalist.com/how-every-asset-class-currency-and-sp-500 -sector-realized-in-2021 /.
And don’t forget the universal principle of any investment: past performance is not necessarily indicative of future results.