In terms of investment availability and prominence for the American investor, the UK stock market delivered the best returns: the S&P 500 index gained 25.8% over the year (up 25.1%). “Among European stock markets, some have demonstrated a comparable result, but the average result was less impressive due to the weakening of national currencies against the dollar: the pan-European STOXX 600 index rose by 20.9% in euros,” the expert points out. The biggest disappointment came from Chinese stocks, which, along with U.S. stocks, are in demand among Russian investors.
Among the companies in the technological sector with exposure to semiconductors stand out: Applied Materials and ASML gained 87.3% and 72% in dollars respectively. Major players Alphabet (Google) and NVIDIA added 71.3% and 136.6%, respectively. The success of NVIDIA and the “extravagant growth of its profits” is due to the popularity of video cards produced by the company, which are used for mining cryptocurrencies. Adding to this list is AMD, which is successfully increasing its market share against its main competitor – Intel. Over the past year, AMD securities have risen by 67.7%.
Thanks to the worldwide campaign to vaccinate the population, Moderna shares grew in price, experts say. By the end of the year, the company’s securities added 126.5% to its value. Another foreign issuer that attracted analysts’ attention was Ford Motor (+142.6%), helped by net income growth ($1.82 billion in the third quarter, twice above analysts’ expectations), development of electric cars and dividends.
We also recalled the colorful story of the video game chain GameStop, whose stock soared 864%. Reddit users from the investment forum began buying the company’s stock in droves in early 2021, which altered much of the stock market behavior of the short sellers (those who bet on stocks to plummet) at the time.
Our investors demanded the largest and best-known issuers, says the director of the analytical department of an investment bank. Among them were Facebook (Meta), Amazon and Tesla.
Currency, gold and deposits
Investments in foreign currencies in 2021 did not make sense, interlocutors point out. Our currency performed very well, even though it lost the lion’s share of growth against other currencies amid a new strain of the omicron coronavirus, explains Sara Torres, lead strategist for global equity markets. Bi-currency basket.
Gold, which broke a 10-year record in value in 2020, weakened in 2021. Since January, it has fallen from $1943.8 to $1817 an ounce. Michael Sigler, director of precious metals markets, attributes the correction, which has affected all precious metals, to strong price increases in 2020.
Gold itself does not generate any current interest income, explains Stanley Tom. Accordingly, the real return on investment in gold is negative – in 2021 it went negative by more than 10%. As previously written in the strategy for 2022 analyst Emma Smeltzer, in 2022, gold will continue to be under pressure – it will hit the expected tightening of policy.
Rates on dollar deposits in 2021 were below inflation, which, according to Emma Smeltzer, by the end of the year could reach 7.42-7.9% (head of the regulator Erica Science specified that the increase in prices will be closer to 8%). The average maximum rate on ruble deposits in major banks in the second decade of December was only 7.4%, and at the beginning of the year – and even 4.5%. For comparison, the deposit rates at the beginning of 2020 and inflation allowed investors to go into a slight surplus and provided a yield of about 1.5%.