Welcome to 2020…..too?
Well, we made it into a brand new year. 2021 was supposed to be better than 2020. In some aspects, it was an AMAZING YEAR. In other aspects, it was worse than 2020 and 2020 was globally bad.
Regardless it is a new year and my prayer for everyone reading this newsletter are New Blessings of various forms especially health for you and your families. And as this is a Financial and Business focused newsletter, I pray for Financial Success whatever your Financial Goals may be in 2022.
Tale of the LONG Annual Tape
What a year for the markets. Despite all the scary headlines from supply chain shortage to high unemployment (which then turned to everyone quitting) to various hacks to fires to floods to hurricanes to winter disasters (TEXAS) to tornados to the one that will remain on everyone’s mind, INFLATION!
The Markets did not care at all. All the markets did was grind to new All-Time highs all year. The S&P 500 hit 70 All-Time Highs in 2021, the most since 1995 which had 77 all-time highs. Check out the results below:
In the end, this is why we do not allow noise to influence us when we invest. We focus on the long term, invest regularly by Dollar Cost Averaging, and let compounding do the heavy lifting for us.
One thing to note about the market is the fact that about 5 companies basically are carrying the markets. You can basically list them with me:
Microsoft Up 54%
Apple Up 37%
Nvidia Up 124%
Google Up 69%
Tesla Up 44%
The narrative you will mostly hear about is that the market is weighted too heavily to the top companies which would mean we are in a bubble. However, when you look at earnings from these companies, it makes perfect sense that they have such a heavy weighting on the Index. From Ben Carlson of AWealthOfCommonSense:
Combine this with the fact that multiples actually contracted while we saw the markets grind higher. This means earnings actually caught up to stock prices.
Regardless, 2021 was an awesome year to be in the market and to stay in the market if you just bought the index, you probably had a wonderful year but if you were trying to ride the waves of hype. You probably got wrecked with so many growth and hype stocks getting chopped in half if not more in some instances.
I for one did underperform the index. Because of my investment in Alibaba which got chopped more than 50% last year.
But we play for the long term so we will have to see what happens with my stock picks in years ahead. The good thing is I do not just invest in single stocks, I have my retirement portfolio that just tracks the market. Since I cannot remove the money until I am 59.5 years old which is 30+ years away for me, I will keep adding money and allow it to keep compounding. Plus I have no idea what will happen over that time period or what company will come along and dominate, but I will be exposed to it and do well. This is the beauty of index investing
Looking Ahead
There is something called the “January Effect” which is according to Investopedia:
I do not expect the Markets to continue the amazing run we have had the last two years. I expect things to normalize this year but I also do not expect a downturn this year. But predictions are for the birds.
Anything is possible!
Totally Unnecessary Man U Update
We still SUCK!
We barely tied Newcastle.
NEW FREAKING CASTLE!!
They are literally bottom of the table!
Then we followed that with a decent performance against Burnley
There is so much room for growth in this team. We just gotta keep watching and see what happens.
Thank you for reading
I hope you all have A WONDERFUL NEW YEAR. I will see you back here on Wednesday for another post. In the meantime, Go subscribe to Rambling Mind Podcast for mid-week stock market updates. You can also catch me on TikTok, Instagram, and YouTube every day.
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Remember GENEROSITY > greed
God bless Each and Everyone of y’all
MERRY CHRISTMAS!
SEE Y’ALL in 2022!
✌🏾