2022 Market Sentiment & Positioning

[aiptasia]

For cyclical and commodity stocks like oil & gas, metals, fertilizers, chemicals, etc they make great short term (3-5 days) swing trades as reflected by their price movement within a range. We shall see which ones can make a breakout out of their bases in 2022 like what O&G and steel did in 2021. Always keep an open mind.

 

[aiptasia]

For specific stocks, I am looking at AEHR and BROS as potential big winners in 2022 (depending on market direction and strength). I took initial positions in both as they are basing now and let's see how they do in the weeks and months ahead. One tech stock and one consumer stock.

I introduced ZIM and some of you have taken an interest to it. Think it can power up further and a 50% gain or higher in 12 months' time is not surprising for a powerful IPO like ZIM (again depending on the market direction and the Fed)

 

[boringLife-]

My view is that US equities will continue to be the best performing asset. Other countries are simply not worth.

 

[d5dude]

For the US stock market, 70% of its rise in 2021 is attributable to a small handful of stocks ie AAPL MSFT NVDA TSLA GOOG etc. Hence the good returns for index investors in the S&P 500 and the Nasdaq. It would not surprise me if this continues to be so in 2022 as these are big liquid stocks with great sales and earnings and hence institutional favourites. Some such as NVDA and AMD look poised for even further growth if the market and Fed cooperates. The irony is that some investors don't like TSLA or AAPL yet they invest in index funds of which their performances are largely driven by these very two stocks and a few others!

Like it or not, tech is still the engine behind any long growth followed by medical/biotech and consumer brands. It's been so for the longest time and will be for the future. Hence, always look for new stock ideas in these 3 groups before others.

More specifically, the top 10 stocks by market cap on the S&P500 have contributed to more than 40% of the S&P500's total return for the year.

Its the pareto principle, some call it "skewness".

https://www.marketwatch.com/story/want-to-know-why-its-so-hard-to-beat-the-market-11637347385
To appreciate why skewness makes it difficult for stockpickers to beat a buy-and-hold, consider research conducted by Hendrik Bessembinder, a finance professor at Arizona State University. In a study that appeared in the Journal of Financial Economics in 2018, Bessembinder found that “the best-performing 4% of listed companies explain the net gain for the entire U.S. stock market since 1926.” The other 96% of stocks, on average, did no better than 90-day T-bills.

In other words, you faced a steep uphill battle to beat the market if you didn’t own those 4%, or even just a small number of them.

 

[gamerx]

My guess is rate hikes for the next 2-3 years will be gentle(r) than expected. Overall impact on equities will be minimal since we are starting from a very low interest rates base.

Tech stocks will continue to soar because who else has a better growth story.

 

[aurvandil]

Among retail investors, there seems to be the sentiment that inflation is an out of control train. Their narrative is that the FED will helplessly raise rates again and again. This will have no effect and inflation will keep going higher and higher. At some point, this will be too much for the "over priced" US mkt to bear and there will be a huge crash. They have set aside a war chest and are waiting with keen anticipation to take advantage of this crash.

 

[ctan84]

Among retail investors, there seems to be the sentiment that inflation is an out of control train. Their narrative is that the FED will helplessly raise rates again and again. This will have no effect and inflation will keep going higher and higher. At some point, this will be too much for the "over priced" US mkt to bear and there will be a huge crash. They have set aside a war chest and are waiting with keen anticipation to take advantage of this crash.

If it can be predicted by retail investors, then high chance this crash won't happen.

 

[aurvandil]

If it can be predicted by retail investors, then high chance this crash won't happen.

It happens to be the opposite of what the yield curve is expecting with regard to inflation.

 

[ctan84]

It happens to be the opposite of what the yield curve is expecting with regard to inflation.

Means no crash but huat big big ?

 

[skpuppy]

I see tourism related stocks hitting new high in 2022 whereas the rest like tech, growth to all go flat or spiral down in 2022. Commodity likely to cheong

 

[dappermen]

It is china and china
https://bbc.in/32JOFOE?fbclid=IwAR3x5v3gs1JR0AplfcUqmqXsi0uPPyEApS9m-zbPl02aZkjweTAu4BzP6kI
Even tattoo biz

 

[revhappy]

This market reminds me of 2017, the whole year the market kept rising and the rise continued into Jan 2018 and then Feb there was the volmageddon wobble. So looks like Jan 2022 we are going to have solid gains.

 

[revhappy]

 

[dappermen]

More bulls or bears??? https://www.moomoo.com/community/feed/107533773438982?lang_code=2

 

[Hello_Kitty]

Happy new year everyone!!! Hope everyone will have a great year in 2022!!!

 

[limster]

STI actually did ok this year, 10% return.

http://www.sgx.com/research-educati...1222-etf-trading-enhancements-commence-17-jan

looking at 31 Dec 2020 - 31 Dec 2021, STI ETF returned 12.1%, not bad though of course not as good as Vanguard World 18.5%.

While all the investors are showing their triple digit returns in another thread. There may be DIY investors who were unable to even beat STI's lousy '12.1%" in 2021.... Thats why I feel its important to have your own personal target returns and work towards it, rather than to look at this or that index, or other investors triple digit returns

 

[thelittlemonkeye]

hats why I feel its important to have your own personal target returns and work towards it, rather than to look at this or that index, or other investors triple digit returns

Well...the index is the benchmark though. So when underperforming the index, have to ask yourself why and what happened. Of course if you don't mind not beating the index that is fine as well.

 

[revhappy]

Well...the index is the benchmark though. So when underperforming the index, have to ask yourself why and what happened. Of course if you don't mind not beating the index that is fine as well.

I actually prefer to benchmark against a 60:40 stocks:bonds index. For a global investor MSCI ACWI is good for the stock index, but not sure what is it for the bond index. But bonds dont give much returns, we can use the ACWI returns and take like 65% of it as the benchmark. If I get those returns from my overall networth(stocks+bonds) then I am happy.

 

[limster]

because there are many benchmarks around, which do you choose. For example, I see some local bloggers who invest only in STI stocks using only STI as a benchmark, and on the opposite end, there are the STI haters who think that STI is a terrible index.

I think its definitely good to be award of the general performance of the World Index (whether FTSE or MSCI) but not to get too carried away looking at numbers. STI ETF is my biggest holding but only gained 12.1% so I can see that it underperformed MSCI World... but it isn't going to influence what I'm going to do with my STI ETF. I'll keep on buying when its under $3 and I'll be happy with collecting the dividends and whatever capital gain when it goes back above $3

At the same time, keeping track of the World Index was important. 2021 was when I (re)started my accumulation of World ETF (VWRD) because of the risk that the pandemic would persist and companies would be hesitant about paying dividends thus affecting my World Dividend ETFs (WQDV / VHYD). Though in fairness to VHYD, it came pretty close to VWRD's performance. As for WQDV - it seems that the index Vanguard is following is 'better' than the one iShares is following - which again adds to the 'confusion' - MSCI and FTSE have competing benchmarks - which one to follow might make a difference.

VWRD/VWRA 18.5%
VHYD 17.7%
WQDV 14.5%

 

[aiptasia]

Well...the index is the benchmark though. So when underperforming the index, have to ask yourself why and what happened. Of course if you don't mind not beating the index that is fine as well.

Benchmarks are very personal though the index is always the fallback when one is undecided. For myself, I always try to do better than my previous personal best.