2021 - The Year In Review
Hello everyone! Welcome to Boodle and thank you for checking out this blog. We are going to cover the financial markets and what occurred in 2021, and later this month, we will offer our forecast for 2022 as to how we expect the Stock Market to perform.
January of 2021 started off where 2020 ended with the Nation & the world worried about the coronavirus, and in America the hopes (and some would say fears) of what a new administration would have to offer to a nation that had been put through the wringer.
Boodle took a financially conservative approach and felt that the Federal Reserve, under Chairman Powell would keep providing enough “liquidity” in the economy in the form of money to keep the nation from slipping into another recession. Now, with hindsight we can see that our position was correct. The Federal Reserve also kept interest rates at historic lows, and this also helped Boodle forecast a calculated rise in stock prices.
We should not forget the role that Congress played in the recovery by passing a $908 billion dollar spending plan by putting cash into people’s bank accounts. Although we went through a 30% decline in equity prices last year (2020) which was a bear market, it was short lived, and we were not calling for a repeat performance in 2021, we were right.
There are many economic indicators that we follow, and one of them is GDP – Gross Domestic Product. This metric calculates all the goods & services produced by American workers – we at Boodle were looking for 3.5% - 4.5% for 2021. The 2021 GDP growth will end up at over 5%.
Inflation proved to be the most “stubborn” metric, and it has remained elevated throughout 2021, and you can see this “elevation” in the form of higher consumer prices such as food & gas prices. We believe that these prices are tied to the inability of the government to get the coronavirus under control. When the Covid-19 virus is finally neutralized, we expect to see inflation start to recede.
The economy chugged along in the springtime, and restrictions were partially lifted in some states regarding the virus. Boodle kept its “fully invested” strategy in place, and we even made some bullish individual stock recommendations for our clients. We identified several buying opportunities, and so far, the clients that took advantaged have been handsomely rewarded.
Company earnings is another key metric that we track here at Boodle and for U.S. companies the earnings, quarter over quarter continued to beat 2020 numbers, we were not surprised by this considering the type of year 2020 eventually turned out to be.
With a backdrop of closed business, closed schools, and short-sighted politicians, we at Boodle kept our eyes on the stock market, and we kept note of how advances were being made, in spite of the constant negative news reports that made every headline seem like gloom & doom would be with us forever – it wasn’t.
The S&P 500 hit an incredible 68 new highs throughout the year, and as of late December we have remained in record territory! This year saw a gain of 26.89% on the S&P 500 and 25.63% on the Total Stock Market Index. We bagged a 14% return on our balanced mutual fund, and a 61% in one of our recommended sector funds! Our individual stock picks returned 49.76% , 9%, and minus 7% (a value play) respectively. Keep in mind that many of these returns are way above the historical norms, and this performance will be difficult to replicate. We worked incredibly hard to identify these opportunities for our clients, and we look forward to having working with people like you who are looking to learn about investing and growing their money as they grow their knowledge. If this sounds like you, then Boodle will be the place to be in 2022! Happy New Year, and we hope to see you back here for our 2022 forecast.