Defining moments in 2021:
In late January, the meme-stock saga began. AMC, GameStop, Blackberry, and stocks of companies that were nearly bankrupt, rallied on the backs of “amateur” day traders. As a result of the rapid price appreciation, hedge Funds and other institutional investors had to cover large short positions, driving up prices even more. Notably known as “meme” stocks, this phenomenon kicked off congressional hearings, trading limitations, and a seemingly revolutionary attitude from the army of retail traders or self-proclaimed “Apes”.
In early March, the broad investing world was introduced to NFT’s, otherwise known as Non-Fungible Tokens. You can think of NFT’s as a digital version of your traditional “Topp’s” baseball trading card or just about anything digital. Since March, there have been NFT’s that have sold for nearly $100 million….
Investors received a small reminder of the financial crisis as the Archegos Capital Management collapse caused ripple effects across Wall Street. The multi-billion-dollar family office, led by Bill Hwang, had increased exposure to investment products linked to Viacom CBS stock. Its failure to meet margin calls led to a $20 billion sell off in the stock over a matter of days.
The NCAA was rattled when the Supreme Court ruled that college athletes could be compensated through name, image, and likeness (NIL).
The chaotic withdrawal of American troops from Afghanistan was completed.
Evergrande, one of China’s largest real estate companies, missed four interest payments to creditors, sending yet another stark reminder to investors of the “too big to fail” establishments.
The Federal Reserve laid out its plan to begin tapering its emergency asset purchase program. The central bank noted that the tapering would likely occur quicker than previously anticipated.
Inflation hit a 38 year high. To top off the month of December, the world was introduced to the latest Covid variant: Omicron.
You often hear our team talking about the constant “noise” that persists in the financial media. Bad news tends to sell. However, if we had a crystal ball and sent out this memo in January of 2021, would you believe that equity markets would be up over 20% across the board at end of year?
Year to date performance a/o market close 12/29/2021:
Dow Jones: 21.60%
From all of us at Hamilton Capital Partners, thank you for another great year.