Categories
Investing

The Top 4 Factors That Will Impact Your Investments in 2022 – Business Insider

The investment space changed a great deal in 2021. From the emergence of NFTs to the enduring impacts of COVID, investors were faced with a range of challenges and opportunities to grow their wealth……..

The investment space changed a great deal in 2021. From the emergence of NFTs to the enduring impacts of COVID, investors were faced with a range of challenges and opportunities to grow their wealth.

So, what’s in-store for 2022?

According to Brendan Doggett, Australia Country Manager for investing business platform Sharesies, investors can still expect quite a few bumps in the road across 2022 — mainly due to COVID, inflation and the increase of interest rates driving operating costs for companies up.

However, it isn’t all doom and gloom.

“The past two years generally showed a steady rise in share markets around the world post the first major dip when the pandemic initially hit — growth companies like tech stocks did very well in 2021,” said Doggett.

“This is actually a normal part of how share markets react if you have a look at how share markets go through cycles over time. For example, since World War II, there’ve been 27 corrections in the S&P 500, but the average annual return, since the index was first started in 1926 through to 2021, is about 10.5%. And over the past five years, the S&P 500 has almost doubled in value.”

If you’re looking to safeguard your investments this year or find new pockets of opportunity to branch out to, here’s what Doggett says are four factors that may impact the investing landscape in 2022.

High inflation and interest rate increases

“To keep economies going during COVID, central banks around the world printed money (Quantitative Easing) so consumers and businesses had more money to spend, as well as lowering interest rates to all-time lows (Expansionary Monetary Policy measures),” explained Doggett.

This, coupled with supply chain issues impacting the accessibility of goods, resulted in inflation, raising the cost of goods and services and diminishing the purchasing power of money.

“While moderate inflation is generally seen as a healthy sign of a growing economy, the high inflation that economies are seeing now can be very damaging if left to persist,” explained Doggett. “To combat this inflation and attempt to move it back to a more moderate level, central banks are now having to try ‘put the brakes on’ a situation that is looking increasingly out of control.”

So, what does this mean for investors? According to Doggett, investors can expect that central banks will take a two-pronged approach that involves reducing or stopping the printing of money and raising interest rates (Contractionary Monetary Policy measures). Doggett explained that these measures could negatively impact share markets, and some investors may worry that the ‘easy money’ the share markets have provided since March 2020 may be coming to an end.

“This fear has been contagious during …….

Source: https://www.businessinsider.com/sc/the-top-4-factors-that-will-impact-your-investments-in-2022

Leave a Reply

Your email address will not be published.