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The 2021 stock market year was fantastic: Investors should now keep an eye on these developments
This is how the stock market year 2021 went
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The 2021 stock market year will go down in history as one of the most successful years. But investors cannot rest. The experts from Finanztest look back – and identify trends that could now become important.
The pandemic really picked up speed at the beginning of 2021: Germany remained in a lockdown, nothing worked anymore. But no matter how bad the mood may be due to the corona restrictions, things were going well on the stock exchange. The world stock market increased by 30 percent, the German market by 14 percent. A great start for newcomers to the stock market, double-digit returns instead of zero interest rate policy.
But the corona crisis has also shown us in the past: There is another way. From February 2020 to the end of March 2020, the prices of the MSCI World, a stock index that tracks over 1,600 stocks from 23 industrialized countries, surged by 30 percent. In November 2021, when the Omikron variant first appeared, the Dax price dropped by a whopping 1000 points. After all, both indices have recovered in a very short time. Nevertheless, these enormous fluctuations show that investors have to be vigilant. And be clear: In volatile times, savings can sometimes go up and down on a large scale. In the financial crisis of 2007/2008, the Dax even lost 54 percent. In severe crises, it can take years before old highs are reached again.
Stock exchanges 2022: What investors need to know
But what exactly should investors consider? What developments were there in 2021, which trends will continue since 2022? The experts from “Finanztest” have examined the past stock exchange year more closely and dare to look ahead to 2022.
Green investments, i.e. sustainable funds, are a big trend. For a long time, this investment was considered a niche trend, but now mixed funds with a green investment philosophy are at the top of the rankings. Serious tragedies such as the flood disaster in North Rhine-Westphalia or Rhineland-Palatinate may fuel this trend, but the good returns also attract investors. The sustainable variant of the MSCI World declined even more than the conventional one.
Another development that may initially be confusing: Of all things, the shares of energy and automotive companies are developing well. Energy companies are benefiting from high demand as the economy recovers. The result: commodity prices are rising.
The papers of the car manufacturers also increased by 50 percent on average. This was not only due to the electric flagship manufacturer Tesla. Ford, Daimler and General Motors also increased. It is true that the end of the combustion engine has been decided and is a burden for the companies. But the sales figures were good recently, and the e-divisions are also developing.
If you feel like gambling, you can take a closer look at the cryptocurrencies. Huge returns could be realized there in 2021. However, the Invest is certainly not a safe bank: the fluctuating prices and the lack of regulations make Bitcoin and Co. modern gold prospecting. The result: In December alone, Bitcoin lost around 20 percent, the maximum loss is almost 80 percent. “We expect that in 2022 the US will adopt cryptocurrencies with appropriate regulation, which has associated ‘bullish’ price implications,” reads Bloomberg’s crypto outlook. So, experts believe that cryptocurrencies are becoming more mature and subject to less wild swings. However, small investors should not lose sight of the risk.
The corona crisis is still present. Some sectors, such as online retail, are benefiting from the limited mobility of customers, while stationary retail is struggling. Inflation fueled this challenge even further.
One thing that hasn’t worked very well over the past year is investing in emerging markets. China and Turkey in particular performed poorly. Inflation in Turkey caused a drop of more than 22 percent, in China the loss was not quite as drastic at just under 16 percent. While many traders avoid Turkish investments, the pros of Bloomberg opportunities in China. Other analysts also assess the situation in China as better. Here’s how looser monetary policy can provide a boost: according to rumours banks should have less liquid funds. Lending should also be boosted. All of this helps the local economy.
The experts from “Finanztest” do not want to make a precise forecast. Rather, in the current issue they offer a whole focus on how investors can set up their portfolio in order to be prepared for all stock market situations. You can get the financial test depot package for a fee www.test.de.