2021 – another year of covid

Just as 2020 was dominated by coronavirus so too was 2021. But 2021 turned out to be a far better year for investors. The big negatives of 2021 were of course dominated by coronavirus:

• Coronavirus mutated into more transmissible variants, drove 3 new waves of cases globally, saw more cases & deaths than in 2020 & saw long lockdowns in east coast Australia.

• Inflation in the US and some other countries rose to levels not seen in decades as the pandemic drove a surge in demand for goods, but left supply struggling to keep up.

• Related to this energy prices – notably gas in Europe and coal in China – surged as a result of energy shortages.

• Bond yields surged and many central banks moved to reduce monetary stimulus (by slowing bond buying) and some actually raised interest rates.

• Chinese growth slowed sharply as a result of policy tightening and an associated property downturn.

• Geopolitical tensions continued to simmer – notably

  between the US and China but also involving Russia & Iran.

• Political uncertainty around the transition of power in the US

  from President Trump gave way to relative calm with most

  of the action being in the Democrat party itself.

• And there was plenty to distract long term investors with

  meme stocks, cryptos and SPACs attempting moon shots and calling into question traditional ways of investing. We have seen it all before though, but cryptos (or rather blockchain) remind us that technology is a regular disruptor, there is lots of spare cash & many are happy to speculate.

  However, despite the dominance of coronavirus and other sources of worry and noise there were significant positives:

  Read on