Upstarts and upsets: what to keep in mind when investing in 2022

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*This content is brought to you by Shyft, the global money app, powered by Standard Bank

Where will you invest in 2022? You just need to know where – and when, and how – to look.

The global stock market is a wild ride even at the best of times, and these (you may have noticed) are not the best of times. Take Zoom, for example…

A sure thing takes a tumble

In the dying light of The Before Times (3 January 2020), shares in the US videoconferencing company were rolling along at a fairly flat $67. You know what happened next: Covid, lockdown, #WFH, masks and social distancing. By mid-October 2020, Zoom shares were suddenly selling at an all-time high of $559.

And then… The opposite happened. Fast-forward to mid-January 2022, and platforms like Microsoft Teams and Google Meet have eaten Zoom’s lunch – so much so that Zoom shares started the year down around $159. You’d have needed a crystal ball to know what a bargain Zoom shares were in early 2020, and it would have taken unheard-of foresight to know that Q4 2020 was the best time to sell.

Gains amid uncertainty

Share prices are tricky things – and investors who try to time the market are on to an absolute hiding.

Bear that in mind as you weigh up which global equities to buy and sell in 2022. Advisory service Morningstar warns of continued “uncertainty” in the US market. “Valuations appear stretched. Economic growth is slowing. Inflation is higher than it’s been in decades,” it warned in an early-year update, adding that the US Federal Reserve was – ominously – planning to raise interest rates.

Still, the S&P 500 index posted a total return just shy of 30% in 2021, continuing a run of 18.4% in 2020 and 31.5% in 2019. The tech-heavy Nasdaq Composite, meanwhile, posted overall gains of about 23% in 2021, after delivering 44.9% in 2020 and 36.7% in 2019. So US stocks remain a smart place for global citizens to invest their money. (The S&P 500 and Nasdaq posted losses over 4% and just under 3% respectively in 2018, though – proving the point that you just never can tell.)

The inflation context

Writing on the Nasdaq blog, financial advisor Martin Tillier admitted that inflation was a worry for US shares in 2022. “But,” he added, “there are two reasons to believe that it won’t have a major, lasting, negative impact on stocks. The first is that the rate hikes the Fed is signalling are in response to inflation. History suggests they will be effective in slowing it down, while starting from such a low base suggests that they won’t cause a sudden reversal of growth. The second is that inflation means higher nominal asset prices in general, and stocks are assets. The real ‘value’ of those assets may be eroded by inflation, but their prices won’t.”

The smart play

So what’s the smartest play when it comes to global stocks in this third year of Covid-19? You may consider an ETF or tracker fund, which provides exposure to indices like the Nasdaq 100 and S&P 500. There might be a single company (or a handful of companies) that feels like it’s about to have a moment, or an industry sector that looks set to deliver the goods.

The point is, you have options – and one of them is to take your investments into your own hands (literally) using an app like Shyft. With Shyft you can buy and sell shares in some of the world’s top companies, as well as get access to global ETFs and tracker funds. So you could have hopped ship from Zoom to the companies behind Teams (Microsoft) and Google Meet (Alphabet) at the tap of a button last year. Because while Zoom may have risen and fallen during the pandemic period, Microsoft and Alphabet both saw their share values rise by 112% between January 2020 and January 2022.

Clearly, the US stock market still has plenty to offer. Maybe you just need to look in the right place.

This post was sponsored by Shyft, the global money app, powered by Standard Bank. With Shyft you can buy forex instantly anytime, anywhere, and at the best rates, and invest in top US stocks and ETFs. Shyft was named Best Financial Solution at the 2021 MTN Business App of the Year Awards. Visit Shyft to download it now, no matter where you bank. Shyft operates under the license of The Standard Bank of South Africa Limited, an authorised Financial Services Provider (FSP number 11287).

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