Here are the charts and themes that sum up 2021…
All-Time Highs
The S&P 500 finished up 28.7% on the year, hitting 70 all-time closing highs, the second most of any year in history (only 1995 had more).
Minimal Volatility
The S&P 500 achieved these gains with minimal volatility. The largest drawdown of 2021 was 5%, much less than the average calendar year drawdown of 14%.
Growth Stocks Boom and Bust
Although the overall market was calm, there were certain parts of the market that got clobbered. Many high growth names that soared in 2020 had the opposite experience in 2021. These massive moves in high growth stocks are an example of the risk involved when investing in individual stocks.
Where This Bull Market Ranks
The current bull market (March 20’ – Current) is the fastest bull market to double by a wide margin. Individuals who stayed invested during the Coronavirus crash were rewarded. Here’s how the current bull market compares to previous…
Inflation
The increase in U.S. consumer prices over the last year is the highest rate we’ve seen since 1982. Surging demand and limited supply led to price increases across the board. Inflation rose from 1.4% to start the year to 7.0% by the end.
The largest driver of this increase was shelter and used car prices. Rent in the U.S. increased by 18% and home prices rose by 19%. Used vehicles have increased by 37% in the last year, with the average used vehicle now costing $29,000.
Market Forecasts Are Almost Always Wrong
Market predictions can often be entertaining and educational but are often wrong. The S&P 500 finished the year at 4,766, above every single Wall Street forecast…
Bottom Line
In a year filled with many challenges and things to be worried about, Corporate America saw record earnings and profit margins. In 2022, one thing is certain: we will see many more surprises in the market. If we can help guide you on your financial journey, reach out
George Maroudas
847-550-6100
george@pmgwealth.com
Twitter @ChicagoAdvisor
Sources/ Disclaimers:
“All Time High Chart” and “Where this bull market ranks” from LPL Research
S&P 500 % off high, inflation chart, induvial stock data from YCharts
Breakdown from Decembers CPI report BLS Consumer Price Index
Rent Price increase by 18% from Apartment List
Home Prices up by 19% from NPR
Used Car Prices up 37% from CBS News
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Any company names noted herein are for educational purposes only and not an indication of trading intent or solicitation of their products or services. LPL Financial does not provide research on individual equities.
Please consult your financial advisor regarding your specific situation. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual
