Daily Column – 3rd January 2022

People went crazy for meme stocks in January, and then there was a short Omicron scare in November and December. This is how the 2021 stock market looked. But in the middle, it was a very smooth ride, even though, you know.

The people who won

The good news is that if you did what Warren Buffett said and put your money in an S&P 500 index fund, you made a lot of money last year. In 2021, the broad index rose 27% and closed at a record high of 70 times. This was the most since 1995, when it was the most.

Energy was one of the best-performing sectors on the S&P 500. Its annual gain of 48 percent was its best ever (thank you, soaring oil prices). At 42%, real estate was the second best-performing sector. Tech and financials both rose by 33%, but real estate was the best-performing one.

Devin Energy was the biggest winner in the S&P 500. It rose almost 190 percent in value. More than half the stocks in Ford, Moderna, and nine other companies in the index saw their value more than double in the last year.

So where are all the big names in tech? They had a good but not great year. Microsoft’s stock rose 51%, and Apple’s stock rose 34%. Apple is now close to having a market value of $3 trillion. When the S&P was going up, it had a lot of help from Big Tech stocks because they were so big.

The people who lost

The Ark Innovation ETF, which tracks small, high-growth tech stocks, lost 24% after going up 150% last year. That fund is home to companies like Roku, Twitter, DraftKings, and Palantir, as well as many other well-known companies.

Many “stay-at-home” stocks that rose in value at the start of the pandemic also fell back down. Zoom lost almost half of its value in 2021, and Peloton lost more than 75% of its value. In 2021, too, the IPOs didn’t work out: For the first time in three years, a fund that tracks public offerings lost more than 9%.

Next year?

Analysts think the stock market will have both good things and bad things happen in 2022. Most people think that stocks will keep going up, even though corporations made record profits in 2021 of 45 percent.

It’s not going to be as big of a deal for stocks this year as it was last year, because the Fed isn’t going to be supporting them as much as it did during the pandemic. People think the central bank is going to stop giving out money this quarter and start raising interest rates again for the first time since 2018 this time around.

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