Dec 21, 2021 – The widely forecast end-of-year “rip your face off” stock rally has yet to materialize. Being that those who pounded the table with this “can’t miss” prediction are usually quite self-serving, often profiting handsomely form taking the other side of the retail trade, investors might want to be cautious before fully embracing this expert guidance.
Investor enthusiasm may be lacking since the news that drives markets is currently contradictory and fails to provide worthwhile guidance which can be relied on for more than a day. Additionally, investor fatigue from the “new normal” which emerged this year may also be sapping interest at this time. While there are still a number of trading days left in 2021, many investors willing to add fresh money to the stock market will probably choose to sit-out these remaining days. Barring unforeseen and extraordinary events emerging, stocks are more likely to finish 2021 with a whimper than a bang, in my opinion.
For all the hoopla, talk of mass institutional adoption, and mind-blowing price forecasts, Bitcoin has absolutely underwhelmed over the past 9 months. Observing how it has responded to events, everyone’s favorite cryptocurrency looks to be still trying to find its true identity. This past year’s price action, despite unprecedented cheerleading, seems to indicate that the more one experiences Bitcoin the less it performs as originally advertised. I’m not counting this digital currency out. It’s just that it is not demonstrating special super powers that put all other asset classes to shame, as implied both implicitly and explicitly, by many pundits.
Histories favorite, buy not Wall Street’s, store of wealth continues to hoover just below $1,800 per ounce. Of course, the quoted price is for trading derivatives, not the physical asset, but that discussion will be revisited in the New Year. It’s fair to say that gold investors are disappointed in the yellow metal’s 2021’s price performance. With the sheer volume of unprecedented macroeconomic and geopolitical distortions and uncertainties bedeviling the world, gold investors expected far more positive returns. This failure to be priced as expected, and in a timeframe which seemed logical, is just another in a long list of anomalies investors will need to accept.
So, while these last days of trading are probably (hopefully) going to remain ho-hum and inconclusive, maybe we should be thankful for this and enjoy the break. I expect 2022 it be anything but dull, and the price for stocks, Bitcoin, and gold at a very different place twelve months from now. In the meantime, do your homework and position accordingly.