Connect with us

Investment

Top 9 Investing Trends For 2022 – Forbes Advisor – Forbes

Published

 on


/*! purgecss start ignore */.tns-outerpadding:0!important.tns-outer [hidden]display:none!important.tns-outer [aria-controls],.tns-outer [data-action]cursor:pointer.tns-slidertransition:all 0s.tns-slider>.tns-itembox-sizing:border-box.tns-horizontal.tns-subpixelwhite-space:nowrap.tns-horizontal.tns-subpixel>.tns-itemdisplay:inline-block;vertical-align:top;white-space:normal.tns-horizontal.tns-no-subpixel:aftercontent:””;display:table;clear:both.tns-horizontal.tns-no-subpixel>.tns-itemfloat:left.tns-horizontal.tns-carousel.tns-no-subpixel>.tns-itemmargin-right:-100%.tns-gallery,.tns-no-calcposition:relative;left:0.tns-gallerymin-height:1px.tns-gallery>.tns-itemposition:absolute;left:-100%;transition:transform 0s,opacity 0s.tns-gallery>.tns-slide-activeposition:relative;left:auto!important.tns-gallery>.tns-movingtransition:all .25s.tns-autowidthdisplay:inline-block.tns-lazy-imgtransition:opacity .6s;opacity:.6.tns-lazy-img.tns-completeopacity:1.tns-ahtransition:height 0s.tns-ovhoverflow:hidden.tns-visually-hiddenposition:absolute;left:-10000em.tns-transparentopacity:0;visibility:hidden.tns-fadeInopacity:1;filter:alpha(opacity=100);z-index:0.tns-fadeOut,.tns-normalopacity:0;filter:alpha(opacity=0);z-index:-1.tns-vpfixwhite-space:nowrap.tns-vpfix>div,.tns-vpfix>lidisplay:inline-block.tns-t-subp2margin:0 auto;width:310px;position:relative;height:10px;overflow:hidden.tns-t-ctwidth:2333.3333333%;width:2333.33333%;width:2333.3333333333%;position:absolute;right:0.tns-t-ct:aftercontent:””;display:table;clear:both.tns-t-ct>divwidth:1.4285714%;width:1.42857%;width:1.4285714286%;height:10px;float:left

/*! purgecss end ignore */#featured-partnersmargin-bottom:20px#featured-partners pmargin:unset;padding:unset#featured-partners.featured-partner-slider .fp-slider-controls,#featured-partners.featured-partner-slider .tns-nav,#featured-partners.featured-partner-slider .tns-visually-hiddendisplay:none@media (min-width:1024px)#featured-partners.featured-partner-slider .fp-wrapperposition:relative;overflow:hidden#featured-partners.featured-partner-slider .fp-wrapper .left-gradient[aria-disabled=true],#featured-partners.featured-partner-slider .fp-wrapper .right-gradient[aria-disabled=true]display:none#featured-partners.featured-partner-slider .fp-wrapper .fp-slider-controlsdisplay:block;width:100%;left:0;top:48%#featured-partners.featured-partner-slider .fp-wrapper .fp-slider-controls .prevposition:absolute;left:-20px#featured-partners.featured-partner-slider .fp-wrapper .fp-slider-controls .prev.left-gradientbackground-image:linear-gradient(270deg,hsla(0,0%,100%,0),hsla(0,0%,100%,.5),hsla(0,0%,100%,.9),#fff);left:0;right:calc(100% – 200px);top:0;bottom:0;margin:14px 0 14px 13px;outline:none#featured-partners.featured-partner-slider .fp-wrapper .fp-slider-controls .prev svgtransform:rotate(-180deg);position:absolute;top:50%;left:20px;cursor:pointer#featured-partners.featured-partner-slider .fp-wrapper .fp-slider-controls .left-borderposition:absolute;width:14px;background:#fcf9f1;height:100%;top:0#featured-partners.featured-partner-slider .fp-wrapper .fp-slider-controls .nextposition:absolute;right:-20px#featured-partners.featured-partner-slider .fp-wrapper .fp-slider-controls .next.right-gradientbackground-image:linear-gradient(90deg,hsla(0,0%,100%,0),hsla(0,0%,100%,.5),hsla(0,0%,100%,.9),#fff);left:calc(100% – 200px);right:0;top:0;bottom:0;margin:14px 13px 14px 0;outline:none#featured-partners.featured-partner-slider .fp-wrapper .fp-slider-controls .next svgposition:absolute;top:50%;right:20px;cursor:pointer#featured-partners.featured-partner-slider .fp-wrapper .fp-slider-controls:aftercontent:””;width:14px;height:100%;position:absolute;top:0;right:0;background:#fcf9f1;z-index:10#featured-partners.featured-partner-slider .fp-wrapper .fp-slider-controls:beforecontent:””;width:14px;height:100%;position:absolute;top:0;left:0;background:#fcf9f1;z-index:10#featured-partners .featured-partners-card .left .heading-wrapper h2,#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper .label,#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper .value,#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-cta,#featured-partners .featured-partners-card .right .heading-wrapper .heading-text h2,#featured-partners .featured-partners-heading,#featured-partners .word-breakerword-break:break-word@media (-ms-high-contrast:none),screen and (-ms-high-contrast:active)#featured-partners .featured-partners-card .left .heading-wrapper h2,#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper .label,#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper .value,#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-cta,#featured-partners .featured-partners-card .right .heading-wrapper .heading-text h2,#featured-partners .featured-partners-heading,#featured-partners .word-breakerword-wrap:break-word;word-break:keep-all#featured-partners img.lozadvisibility:hidden#featured-partners img.loadedvisibility:visible#featured-partners .featured-partners-headingfont:700 24px/34px EuclidCircularB,sans-serif;color:#333;margin:0 0 20px;border:none;padding:0@media (max-width:1024px)#featured-partners .featured-partners-headingfont-size:18px;line-height:28px;margin-bottom:5px#featured-partners .featured-partners-containerbackground:#fcf9f1;padding:14px#featured-partners .featured-partners-card .inner-wrapperdisplay:flex;justify-content:space-between;background:#fff;border:1px solid #c3cce5;border-radius:5px;padding:30px 20px;position:relative#featured-partners .featured-partners-card .leftwidth:calc(100% – 420px);padding-right:40px@media (max-width:1024px)#featured-partners .featured-partners-card .leftwidth:100%;padding-right:0#featured-partners .featured-partners-card .left .heading-wrapperdisplay:flex;align-items:flex-start#featured-partners .featured-partners-card .left .heading-wrapper pfont:15px/19px EuclidCircularB,sans-serif;color:#fff;letter-spacing:-.5px;background:#3d4a85;min-width:24px;height:24px;border-radius:50%;display:flex;align-items:center;justify-content:center;margin:6px 0 0#featured-partners .featured-partners-card .left .heading-wrapper h2font:700 28px/34px EuclidCircularB,sans-serif;color:#333;margin:0 0 0 10px;border:none;padding:0#featured-partners .featured-partners-card .left .partners-statsmargin-top:44px#featured-partners .featured-partners-card .left .partners-stats .stats-wrapperdisplay:flex;justify-content:space-between;align-items:center;border-bottom:1px solid #c3cce6;padding:10px 0#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper:first-of-typepadding-top:0#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper:last-of-typeborder-bottom:none;padding-bottom:0#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper .labelfont:12px/16px EuclidCircularB,sans-serif;color:#333;width:50%;padding-right:10px;padding-bottom:0;opacity:.6;margin:0#featured-partners .featured-partners-card .left .partners-stats .stats-wrapper .valuewidth:50%;font:16px/20px EuclidCircularB,sans-serif;color:#333;margin:0;text-align:right#featured-partners .featured-partners-card .rightwidth:420px@media (max-width:1024px)#featured-partners .featured-partners-card .rightwidth:100%#featured-partners .featured-partners-card .right .heading-wrapperdisplay:none;justify-content:space-between;margin-bottom:10px#featured-partners .featured-partners-card .right .heading-wrapper .heading-textdisplay:flex;margin-right:10px;width:100%#featured-partners .featured-partners-card .right .heading-wrapper .heading-text pfont:15px/19px EuclidCircularB,sans-serif;color:#fff;letter-spacing:-.5px;min-width:24px;height:24px;border-radius:50%;margin:2px 0 0;background:#3d4a85;display:flex;align-items:center;justify-content:center;flex:0 0 auto#featured-partners .featured-partners-card .right .heading-wrapper .heading-text h2font:700 22px/26px EuclidCircularB,sans-serif;color:#333;margin:0 0 0 10px;border:none;padding:0@media (max-width:1024px)#featured-partners .featured-partners-card .right .heading-wrapper .heading-text h2font-size:18px;line-height:22px#featured-partners .featured-partners-card .right .heading-wrapper .logobackground-position:50%;background-repeat:no-repeat;background-size:contain;height:50px;width:140px;max-width:100%#featured-partners .featured-partners-card .right .logo-wrapperdisplay:flex;align-items:center;justify-content:space-between#featured-partners .featured-partners-card .right .logo-wrapper.no-telephone-numberjustify-content:flex-end#featured-partners .featured-partners-card .right .logo-wrapper .phone-numberborder:1px solid #c9c9c9;border-radius:10px;width:218px;height:50px;display:flex;align-items:center;justify-content:center;padding:0 10px;font-weight:700#featured-partners .featured-partners-card .right .logo-wrapper .phone-number spanfont-family:EuclidCircularB,sans-serif;font-size:16px;line-height:20px;color:#000;margin:0;display:flex;align-items:center;text-decoration:none#featured-partners .featured-partners-card .right .logo-wrapper .phone-number span acolor:#000#featured-partners .featured-partners-card .right .logo-wrapper .phone-number span svgmargin-right:10px#featured-partners .featured-partners-card .right .logo-wrapper .logobackground-position:50%;background-repeat:no-repeat;background-size:contain;height:50px;width:140px;max-width:100%#featured-partners .featured-partners-card .right .btn-wrappermargin-top:20px#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-ctamin-height:80px;box-shadow:0 4px 12px rgba(0,0,0,.2);border-radius:10px;background:linear-gradient(0deg,#35b782,#35b782),#35b782;display:flex;align-items:center;justify-content:center;transition:all .2s ease;padding:25px 10px;text-decoration:none@media (max-width:1024px)#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-ctamin-height:50px;padding:10px#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-cta:hoverbackground:#32a274;text-decoration:none#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-cta spanfont:500 20px/30px EuclidCircularB,sans-serif;color:#fff;font-weight:700#featured-partners .featured-partners-card .right .btn-wrapper .get-estimate-cta span svgmargin-left:8px;height:14px;width:14px;display:inline-block;vertical-align:unset#featured-partners .featured-partners-card .right .btn-wrapper p.cta-subtextfont:400 10px/13px EuclidCircularB,sans-serif!important;text-align:center;color:#333;margin:10px 0 0!important@media (min-width:1024px)#featured-partners .featured-partners-card .right .btn-wrapper p.cta-subtextfont:400 12px/15px EuclidCircularB,sans-serif!important#featured-partners .featured-partners-card .right .btn-wrapper p.cta-subtext spanfont:400 10px/13px EuclidCircularB,sans-serif@media (min-width:1024px)#featured-partners .featured-partners-card .right .btn-wrapper p.cta-subtext spanfont:400 12px/15px EuclidCircularB,sans-serif@media (max-width:599px)#featured-partners.single-featured-product .featured-partners-card .right .heading-wrapperflex-direction:column#featured-partners.single-featured-product .featured-partners-card .right .heading-wrapper .heading-textmargin-bottom:10px#featured-partners.single-featured-product .featured-partners-card .right .heading-wrapper .logomargin:0 auto#featured-partners.single-featured-product .featured-partners-card .right .logo-wrapperheight:50px@media (max-width:1024px)#featured-partners.single-featured-product .featured-partners-card .right .logo-wrapper.no-telephone-numberdisplay:none;height:auto#featured-partners.multi-featured-products .featured-partners-containerdisplay:flex;padding:14px 7px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-cardpadding:0 7px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .inner-wrapperjustify-content:flex-end;flex-direction:column-reverse;padding:35px 20px;height:100%@media (-ms-high-contrast:none),screen and (-ms-high-contrast:active)#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .inner-wrapperheight:auto@media (max-width:1024px)#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .inner-wrapperpadding:25px 10px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .leftwidth:100%;padding-right:0#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .left .heading-wrapperdisplay:none#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .left .partners-statsmargin-top:16px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .rightwidth:100%#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .heading-wrapperdisplay:flex;align-items:flex-start#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .logo-wrapper .phone-numberwidth:100%#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .logo-wrapper .logodisplay:none#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .btn-wrappermargin-top:12px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .get-estimate-ctamin-height:50px;padding:10px;width:100%#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .get-estimate-cta spanfont-size:16px;line-height:30px@media (min-width:1024px)#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .get-estimate-cta spanfont-size:17px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .right .get-estimate-cta span svgheight:12px;width:12px#featured-partners.count-1 .loaderdisplay:none#featured-partners.count-2 .featured-partners-cardwidth:50%#featured-partners.count-2 .featured-partners-card .inner-wrapperpadding:20px!important#featured-partners.count-2 .featured-partners-card .right .heading-wrapperalign-items:center!important;margin-bottom:15px#featured-partners.count-3 .featured-partners-container .featured-partners-card,#featured-partners.featured-partner-slider .featured-partners-container .featured-partners-cardwidth:33.3333333333%#featured-partners.count-3 .featured-partners-container .featured-partners-card .inner-wrapper,#featured-partners.featured-partner-slider .featured-partners-container .featured-partners-card .inner-wrapperpadding:25px 15px#featured-partners.count-3 .featured-partners-container .featured-partners-card .heading-wrapper,#featured-partners.featured-partner-slider .featured-partners-container .featured-partners-card .heading-wrapperflex-direction:column#featured-partners.count-3 .featured-partners-container .featured-partners-card .heading-wrapper .heading-text,#featured-partners.featured-partner-slider .featured-partners-container .featured-partners-card .heading-wrapper .heading-textmargin:0 0 10px#featured-partners.count-3 .featured-partners-container .featured-partners-card .heading-wrapper .logo,#featured-partners.featured-partner-slider .featured-partners-container .featured-partners-card .heading-wrapper .logomargin:0 auto#featured-partners.count-4 .featured-partners-container .featured-partners-cardwidth:50%#featured-partners.count-4 .featured-partners-container .featured-partners-card:nth-of-type(3),#featured-partners.count-4 .featured-partners-container .featured-partners-card:nth-of-type(4)margin-bottom:0@media (max-width:1023px)#featured-partners.count-4 .featured-partners-container .featured-partners-cardmargin:0;min-width:250px#featured-partners.count-4 .featured-partners-container .featured-partners-card .right .heading-wrapperflex-direction:column;align-items:center;margin-bottom:15px#featured-partners.count-4 .featured-partners-container .featured-partners-card .right .heading-wrapper .heading-textmargin-bottom:10px#featured-partners.count-4 .featured-partners-container .featured-partners-card .right .heading-wrapper .heading-text h2font-size:20px;line-height:24px@media (max-width:1024px)#featured-partners.count-4 .featured-partners-container .featured-partners-card .right .heading-wrapper .heading-text h2font-size:18px;line-height:22px@media (max-width:1023px)#featured-partners .featured-partners-container .featured-partners-cardmargin-right:0#featured-partners .featured-partners-container .featured-partners-card .inner-wrapperpadding:25px 10px;flex-direction:column-reverse#featured-partners .featured-partners-container .featured-partners-card .leftmargin-right:0#featured-partners .featured-partners-container .featured-partners-card .left .heading-wrapperdisplay:none#featured-partners .featured-partners-container .featured-partners-card .left .partners-statsmargin-top:16px#featured-partners .featured-partners-container .featured-partners-card .right .heading-wrapperdisplay:flex#featured-partners .featured-partners-container .featured-partners-card .right .logo-wrapper .phone-numberwidth:100%#featured-partners .featured-partners-container .featured-partners-card .right .logo-wrapper .logodisplay:none#featured-partners .featured-partners-container .featured-partners-card .right .get-estimate-ctaheight:50px#featured-partners .featured-partners-container .featured-partners-card .right .get-estimate-cta spanfont-size:16px;line-height:30px#featured-partners .featured-partners-container .featured-partners-card .right .get-estimate-cta span svgheight:12px;width:12px#featured-partners.multi-featured-products .featured-partners-containeroverflow-x:auto#featured-partners.multi-featured-products .featured-partners-container .featured-partners-cardmin-width:250px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .heading-wrapperflex-direction:column#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .heading-wrapper .heading-textmargin:0 0 10px#featured-partners.multi-featured-products .featured-partners-container .featured-partners-card .heading-wrapper .logomargin:0 auto.loaderposition:absolute;left:0;top:0;width:100%;height:100%;background-color:#fff;z-index:9;padding:35px 20px;border-radius:5px.loader__blocksbackground-image:linear-gradient(90deg,#f4f4f4,hsla(0,0%,89.8%,.8) 40px,#f4f4f4 80px);background-size:600px;-webkit-animation:shine-avatar 2s ease-in-out infinite;animation:shine-avatar 2s ease-in-out infinite;border-radius:5px.loader__headerheight:30%;margin-bottom:10px.loader__phoneheight:10%;margin-bottom:12px.loader__ctaheight:10%;margin-bottom:10px.loader__attrheight:45%@-webkit-keyframes shine-lines0%background-position:-100px40%,tobackground-position:270px@keyframes shine-lines0%background-position:-100px40%,tobackground-position:270px@-webkit-keyframes shine-avatar0%background-position:-32px40%,tobackground-position:400px@keyframes shine-avatar0%background-position:-32px40%,tobackground-position:400px

Think back to a year ago. Everybody was ready for a booming economic recovery and a summer of love in 2021, all made possible by Covid-19 vaccines. Some were even saying the end of the pandemic was in sight.

Then the Delta and Omicron variants arrived. As 2021 draws to a close, the pandemic continues unabated, generating one mixed signal after another and greatly complicating the global economic recovery.

In the stock market, however, the party lasted all year long. The total return on the S&P 500 in 2021 was more than 27%—not even dramatic inflation data was able to dampen the animal spirits. Not yet, anyway.

But observers are wondering how much longer the bull market can last—barely interrupted as it was by the shortest bear market ever in early 2020. There are signs that last call could be around the corner—tempered by other indications that investors still have money to make in 2022.
Here are the top nine investing trends to watch out for in the new year.

1. Markets Are Still Being Driven by the Covid-19 Pandemic

Which way will the pandemic winds blow? There’s hope that 2022 is the year when normalcy returns, sending travel, commercial real estate and traditional retail stocks even higher—but then again, we’ve heard that story before.

Delta dashed the dream in 2021. And as the calendar turns, Omicron’s emergence offers both short-term and long-term worries. Even if this variant doesn’t produce another surge of deadly infections, what about the next variant? Mother Nature, not humans, gets to write the end of this story.

Principally, investors should realize that the post-Covid market rally is already here, even if the pandemic isn’t over yet. That’s because stock markets have likely already priced in most or all of the gains that can be expected from a fully reopened economy.

.myfi-widget-mb-0 iframe margin-bottom: 0px !important;

While there are still mask mandates and airline travel remains below pre-pandemic levels, many Americans have already returned to a relatively normal life, so even if luck turns and the pandemic finally peters out sometime in 2022, there might not be much more room for the economy—or the stock market—to run.

2. Federal Reserve Rate Hikes Are Likely in 2022

Stocks do well when the Federal Reserve keeps interest rates low, but the days of the Fed’s zero interest rate policy (ZIPR) are numbered. The only question investors should be asking themselves is how many Fed interest rate hikes will happen in 2022.

The CME’s FedWatch Tool predicts at least two rate increases, based on how traders are speculating in the futures market. Meanwhile, the already planned reductions in the Fed’s monthly bond purchases—the so-called taper—means that quantitative easing (QE) will be over by spring.

QE and rock-bottom rate have helped to prop up stocks since early 2020. But more bad news, like even hotter inflation reports, might force the Fed to tighten monetary policy even faster, and that’ll probably end badly for stocks.

3. Tired of Hearing about Inflation? It’ll Get Worse Before It Gets Better

It’s undeniable: U.S. consumers (and financial media) are fixated on inflation. Casual dismissals of high gas prices and supply-chain-related shortages as “transitory” won’t work in 2022. The course of inflation is going to be an even bigger story in 2022, and if the current trends aren’t reversed soon, there’s going to be market turmoil.

Higher interest rates and higher inflation are a recipe for a Wall Street retreat. It might, however, signal opportunities in the bond market or even provide some good news for savers in the form of higher APYs.

4. Supply Chain Solutions

Check out any U.S. port today and you’ll see piles and piles of shipping containers waiting to be unloaded or to be refilled with goods. This is just one tipoff that the supply chain challenge no longer looks like a short-term issue.

There might be some good to come from supply chain issues over the long term. Americans are for the first time in a long time questioning the wisdom and national security implications of buying and making nearly all our products overseas. That’s good.

But in the short-term, it’s probably bad for markets. Even if the pandemic mercifully ends, there will be no full-term recovery until supply chains smooth out and keep store shelves full. And the Omicron variant isn’t making resolution of this issue any easier, guaranteeing that it will stick around in 2022.

5. Recovery, I Hardly Knew Ye

The raging gross domestic product (GDP) growth of 2021 has been frequently underplayed in the media. In the first half of 2021, the U.S. economy was cooking along with 6% quarter-over-quarter GDP increases. That’s unsustainable—and we found that out in the third quarter, when growth fell to 2%.

That was an early indication that the re-opening dividend might have come and gone. A fourth-quarter recovery is expected, but imagine if 2022 settles in with low levels of GDP growth right as the Fed gets really scared about inflation. This could be a perilous combination for stockholders.

6. The Job Market Is Still Unsettled

The marked improvement in the job market was a major story in 2021. By November, U.S. unemployment had fallen to 4.2%, and—as you’d expect—the tight market has helped push wages higher.

The numbers present an incomplete picture of the real labor market, however. The U.S. still hasn’t regained the 22 million jobs it lost during the pandemic recession, and it’s millions of jobs short of where its pre-pandemic trajectory should have taken the job market.

So why is unemployment so low? Much of the gap can be chalked up to women forced out of the labor market while trying to navigate child care, plus their overrepresentation in industries hit hardest during the pandemic.

The ferocious competition for workers has hurt companies with higher labor costs and staffing challenges. These issues need to be worked out before the labor market can return to normal—and until then, it will remain another drag on many public companies.

7. Have the FANNG Stocks Lost their Bite?

If you want a real sign that the stock market could be in for a slowdown in 2022, look to the FAANG stocks.

This is a Wall Street nickname for the five tech giants that have been a driving force behind the bull market for years now, including Meta—formerly Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Alphabet—parent of Google (GOOGL). Microsoft (MSFT) is sometimes substituted for Netflix, making the acronym FAAMG.

Last year, we predicted a rotation out of FAANG, because the tech giants had run so far so fast during 2020. We turned out to be only partially correct. Microsoft and Google gained even more in 2021 (our bad), while more modest 2021 gains at Facebook and Amazon actually underperformed the wider market.

In fact, according to Morningstar’s U.S. Large-Mid Index, in 2020 the FAANG stocks contributed approximately 25% of the total market’s returns. This year through late November, the FAANG stocks contributed barely 3% of the market’s returns.

So the FAANG stocks were not a bad bet in 2021, but they came real close. Some analysts say it’s inevitable that investors will go looking elsewhere for returns in 2022, further benefiting names like Tesla (TSLA). Could we suggest boring consumer staples with dividend-enhanced returns as a place to find comfort while inflation creates uncertainty?

8. Where Are the Chips?

The ongoing computer chip shortage will continue to impact stocks—and not just tech stocks. Practically all consumer durable goods have a computer chip in them now, so the shortage is a bigger problem than laptops. Detroit parking lots are overflowing with almost-completed cars right now, just waiting for scarce computer chips that still need to be installed.

Even an early end to the pandemic wouldn’t necessarily end this dimension of the supply chain crack-up. Here’s just one example: So-called DSP chips, which convert analog to digital signals, necessary for audio equipment ranging from podcast mixers to TVs to cell phones, are in short supply. Blame a terrible fire at a Chinese plant in late 2020 that complicated pandemic problems.

Intel says the chip shortage will last into 2023. That might be a good reason to consider buying chipmaking stocks—but it also might be a better reason to fret over the stability of most other consumer discretionary names.

9. Midterm Elections

Perhaps the biggest uncertainty of 2022 are the midterm Congressional elections. Republicans are likely to do well, as the sitting president’s party usually loses seats in the midterms. Still, the fight seems poised to be hyperpartisan, which might lead to unpredictable news, instability or even violence. That’s the kind of surprise that can spook investors.

It’s also not new. The run-up to midterms often roil stocks, particularly when a power shift in Washington is anticipated. An analysis by Green Bush Financial of stock returns in 1994, 2006, and 2010—the last three times Congressional bodies switched parties—provides a clear warning.

“In all three of those years where a shift in power was in the cards, the stock market was either down or flat leading up the midterm elections in November,” the analysis found. All is not lost, however. All three years, the market churned higher after the election.


Adblock test (Why?)



Source link

Continue Reading

Investment

Ford sees $8.2 billion gain on its investment following Rivian’s IPO – Driving

Published

 on


Ford continues to gain, despite abandoned plans to jointly develop an EV with the startup

Article content

Ford Motor Co. expects to record a gain of $8.2 billion in the fourth quarter on its investment in RivianAutomotive Inc. after the electric-truck maker’s blockbuster initial public offering late last year.

Article content

The legacy automaker disclosed the gain Tuesday along with several special items it intends to report when Ford releases earnings on Feb. 3. The Dearborn, Michigan-based company will also reclassify a non-cash gain of about $900 million on the Rivian investment from the first quarter of last year as a special item, meaning it will be excluded from the full-year adjusted results, according to a statement.

The disclosures show Ford continues to gain from its connection to the startup even after the auto giant exited Rivian’s board in September and subsequently announced it had abandoned plans to jointly develop an electric vehicle. Ford, which has invested a total of $1.2 billion in Rivian since early 2019, has a 12 per cent stake that the company has said was valued at more than $10 billion in early December.

Article content

  1. Rivian delays big battery packs to prioritize more deliveries

    Rivian delays big battery packs to prioritize more deliveries

  2. Tesla doubles down on accusations rival Rivian stole its battery secrets

    Tesla doubles down on accusations rival Rivian stole its battery secrets

Since a November listing that was the largest IPO of 2021, Rivian has been on a roller coaster. The shares peaked at more than $172, but have tumbled 57 per cent since then as the company faced new competition in the electric-vehicle market. Rivian was briefly valued at more than $100 billion, then more valuable than Ford, but Ford has subsequently reclaimed the lead after it topped $100 billion in value for the first time last week.

Ford shares were little changed in after-hours trading Tuesday in New York, while Rivian climbed less than one per cent.

Adblock test (Why?)



Source link

Continue Reading

Investment

ByteDance reorganizes strategic investment team, causes panic – Yahoo Movies Canada

Published

 on


What a roller coaster day for China’s tech industry. TikTok’s parent company ByteDance has dissolved its strategic investment team, sending worrying messages to other internet giants that have expanded aggressively by investing in other companies.

At the beginning of this year, ByteDance reviewed its “businesses’ needs” and decided to “reduce investments in areas that are not key business focuses,” a company spokesperson said in a statement.

ByteDance isn’t halting external investments outright, though; instead, the investment team will be “restructured” and “integrated across the various business lines to support the growth” of its business.

In other words, some members from its strategic investment team, which has backed 169 companies, according to Chinese startup database IT Juzi (some deals may not be public), will be reassigned roles in other business departments and continue to invest there.

The “restructuring” still stirred up a wave of panic in the industry. China’s cyberspace regulator has drafted new guidelines that will require its “internet behemoths” to get its approval before undertaking any investments or fundraisings, Reuters reported, citing sources. Some Chinese media outlets also reported similar drafted rules.

“Behemoths” refer to any internet platform with more than 100 million users or more than 10 billion yuan ($1.58 billion) in revenue, said Reuters’ sources. That rule, if true, will put a slew of Chinese internet giants, from Tencent, Alibaba, Pinduoduo, JD.com to Baidu, under regulatory review for their investment activities. Tencent in particular is famous for its expansive investment portfolio, which earns it the moniker “the SoftBank of China.”

In a surprising turn, China’s cyberspace regulator said that the “rumored guidelines for internet companies’ IPO, investment and fundraising are untrue.” Furthermore, the authority will “investigate and hold relevant rumormongers responsible in accordance with the law.”

ByteDance’s motive for restructuring may indeed be to generate more synergies between its external investments and internal businesses. We don’t know for sure yet. But there are signs that China’s antitrust action on its internet darlings are nowhere near the end.

Tencent recently sold a great chunk of its shares in two of its most important allies, Chinese online retailer JD.com and Singaporean video games and e-commerce conglomerate Sea. While antitrust pressure wasn’t cited as the cause for its divestments, speculation is rife that China is continuing to blunt the monopolistic power of its largest interent platforms. A handful of them have received various degrees of fines for violating anticompetition rules, but a pause on their investment game will carry much greater consequences. The question now is who’s next.

Adblock test (Why?)



Source link

Continue Reading

Investment

CSA shines a light on greenwashing – Investment Executive

Published

 on


Greenwashing has become an issue for regulators who worry that investors could be intentionally or inadvertently misled about the green credentials of the funds they buy.

“In addition to leading investors to invest in funds that do not meet their objectives or needs, greenwashing may also have the effect of causing investor confusion and negatively impacting investor confidence in ESG investing,” the CSA warned in its notice setting out the new guidance.

The regulators reported that targeted reviews of investment funds’ continuous disclosure in this area revealed a number of shortcomings. Some funds had potentially misleading disclosure, the CSA found, while others featured inadequate reporting to investors on investment strategies, proxy voting practices and ESG performance.

Many funds “lacked detailed disclosure” about the specific ESG factors considered in their investment strategies and how those factors are evaluated.

Regulators also found that many funds provided more detailed ESG disclosure in their marketing materials than in their prospectuses; that most funds didn’t detail portfolio changes that were driven by ESG considerations; and that more than half of the funds that use proxy voting as part of their ESG strategies didn’t set out specific voting policies.

“In addition, the vast majority of the funds reviewed did not report on their progress or status with regard to meeting their ESG-related investment objectives,” it said.

In the wake of that review, the regulators indicated they don’t believe current disclosure requirements need to be revised to specifically address ESG factors. However, the CSA said “regulatory guidance is needed to clarify how the current disclosure requirements apply to ESG-related funds and other ESG-related disclosure in order to improve the quality of ESG-related disclosure and sales communications.”

The new guidance doesn’t add requirements for fund managers, but it does provide insight into areas where firms may be falling short of meeting existing disclosure expectations.

On the issuer side, the CSA is consulting on proposed new climate risk disclosure requirements for public companies.

For investment funds, the regulators are hoping that guidance will be enough by bringing “greater clarity to ESG-related fund disclosure and sales communications to enable investors to make more informed investment decisions.”

Among other things, the guidance recommends that funds that aim to generate a measurable ESG outcome report their results to investors.

“For example, where a fund’s investment objectives refer to the reduction of carbon emissions, investors would benefit from disclosure in the fund’s [performance report] that includes the quantitative key performance indicators for carbon emissions,” it said.

On marketing materials, the CSA said that “a sales communication that does not accurately reflect the extent to which a fund is focused on ESG, as well as the particular aspect(s) of ESG that the fund is focused on, would both be misleading and conflict with the information in the fund’s regulatory offering documents.”

It also said that the use of fund-level ESG ratings, scores or rankings may be misleading. Reasons include conflicts with the rating provider, cherry-picking positive scores, and failing to disclose qualifications or limitations to a rating or ranking that would supply added context.

“Interest in ESG investing is on the rise and this enhanced and practical guidance will play an important role in helping investors make informed decisions about ESG products, as well as preventing potential greenwashing,” said Louis Morisset, chair of the CSA and president and CEO of the Autorité des marchés financiers (AMF), in a release.

The CSA indicated that it will continue to review ESG-related disclosures as part of its continuous disclosure reviews.

Adblock test (Why?)



Source link

Continue Reading

Trending