Brokerage

January 2021’s GameStop craze, which witnessed share prices shooting up beyond their values due to amateur retail investors’ intense buying, still has Wall Street shaking its head. The so-called David-versus-Goliath event brought pain to some established investors but profits to others—along with serious lessons about the power of mania.

Although Omicron has investors on edge as a new year kicks off, sabotaging forecasts pinned on the pandemic’s welcome end, opportunities for positive returns will still be available in 2022. What trends in stocks, bonds, real estate investment trusts and cryptocurrencies will determine how rewarding these investments are during the year?

With another new year close at hand, what main trends should investors carefully consider when making investment decisions for 2022? Sustainability, electric vehicles, artificial intelligence and cannabis are four themes likely to stand out during a year that will hopefully surpass 2021’s economic rebound and record-breaking progress.

The trend away from fossil-fuel reliance and toward renewable-energy deployment is entrenched, and solar energy leads the renewables pack. Supply-chain bottlenecks and rising costs of raw materials may hamper its growth, but experts are optimistic about its future, expecting public and private sectors to continue to drive its adoption.

The impact of rising natural-gas prices in Europe is reaching beyond households as power-generation demand for coal surges, causing a scramble for carbon permits, with their prices breaking records. Beset by government action and supply shortages, EU Allowances will likely continue to be hot commodities, at least until gas prices fall.

Bitcoin achieved a milestone with the recent approval of a bitcoin futures ETF by the SEC. Will the ProShares Bitcoin Strategy ETF be the first of a series or a one-time deal? Investor-protection measures will need to be enhanced before the floodgates are opened in the US, but other countries have shown greater acceptance and flexibility.

The price of gold is a trustworthy barometer of investor anxiety. When it’s high, a crisis has likely prompted investors to seek it as a safe haven. COVID-19 was that crisis in 2020, driving gold’s price to new heights, but throughout 2021, it has fallen as conditions have improved. Will the Omicron variant send gold prices soaring again?

When bitcoin, the first cryptocurrency, was birthed in 2008, few envisioned it becoming legal tender. But it did, in September 2021, in El Salvador. The Central American country is on a growing list of emerging markets embracing cryptos and CBDCs as preferred currencies due to their many benefits, blazing the trail for global acceptance.

European investors are understandably biased toward European equity opportunities, but relative returns vis-à-vis the US may cause them to doubt this strategy. A reversion may be imminent, with Europe’s comparative advantages, such as earnings growth, equity-market composition and sustainability, making it the wiser choice in the future.

Inflation has been a consistent theme worldwide in 2021—Europe included, which is dealing with surging prices of a commodity on which its households and industries heavily rely, natural gas. The cause is a widening demand and supply mismatch, which may worsen as winter approaches, although small supply improvements may mitigate the pain.