100,000 subscribers. Amazing right?
In the beginning of 2021, the subscriber count was at 1200. I was shooting for 10,000 by the end of the year.
But you gave amazing support that surpassed my expectation of 10,000 and took it to 100,000.
A big thank you for all of you.
I will share my last one year experiences in the next episode.
In this episode, we will take a closer look at how the market has performed in 2021 and what we can expect in 2022.
Hi. My name is Vijay Mohan. You are watching - Investment Insights.
Let's start with Indian stock market index Nifty 50.
Nifty 50's last year return: 24%. We should expect only an average return of 10 - 12% every year.
Anything more than that, we should accept it gladly as bonus for that year.
2021 is an amazing year for 2021.
Just because we have got 24% return in 2021, we should expect the same in coming years as well.
We can understand this by looking at the yearly returns in the last 5 years.
28%, 3%, 12%, 15%, 24% - we can see how the returns have changed every year in the last 5 years.
That is why, Like I always say, it is better to invest as and when we have money for long term without worrying about the short term movement of the market.
Many sectors have performed better than Nifty 50 in 2021.
Nifty metal, Nifty IT, Nifty Realty - all have given returns more than 40%.
What does that make us think? Switching to those sectors for this year. That is what we should not do.
No one can predict how a sector will perform in any given year.
A good performance of a sector in a year does not mean that it will do the same in next year.
That is why we should invest in Nifty 50 that has exposure to all sectors.
But if you believe strongly in a sector and you think that will do well in the future, then you can get little exposure to that specific sector.
Nothing wrong with that. But do not buy sector specific funds just because some YouTube expert recommended.
For that, buying just index is better.
Now let's check out US' index S&P 500.
It has given a return of 28.7% in 2021.
On average, we are expecting 10-12% return from S&P 500.
But in last 3 years, the returns are at 31%, 18% and 29% - lot more than our expectation.
At some point, it has to come down to average.
But no one can predict when that would happen. What can we do then?
Correct. We should just continue our investment without any crazy prediction.
But just in case if the market goes down, we should see it as a good thing and increase our savings rate and investments.
Now let's take a look US' Non-Financial index Nasdaq 100.
Its return in 2021 is 27%, bit lesser than S&P 500.
Many expected this to fall down drastically in 2021.
But it is just keep running.
It has given positive returns for the past 13 years continuously.
That too with an annualized return of 21% for the past 10 years. This is record run.
Would it continue this run in the future? Difficult.
But we are seeing many changes in our landscape.
Artificial Intelligence, Machine Learning, Crypto, Cloud computing, SAAS, Genomics, Space exploration - lot of things are advancing in this decade that was not in last decade.
So it will not come out as a surprise if this Nasdaq 100 continues its great in the current decade as well.
Both S&P 500 and Nasdaq 100 have given amazing returns in 2021.
But we should not mistake that for US stock market doing great.
Many high growth stocks that sky rockets in 2020 have fallen down significantly in 2021.
High growth companies like Zoom, Palantir, Teladoc, Square etc. all came down more than 50% from its peak price.
ARKK's 2021 return is at -22%.
That downtrend for high growth companies is continuing in the first week of 2022 as well.
This is a gentle reminder for us.
When we are looking for higher return taking higher risk, we should be willing to go. thru higher pain as well.
If this kind volatility is not your cup of tea, it is better to reduce the exposure of these high growth stocks.
Avoiding them totally is even better.
Now let's take a look at Gold. In 2019 and in 2020, gold price went up by 18% and 25% respectively. But in 2021, it has gone down by 4%.
We have already taken a closer look at gold in another episode. This is a weird asset. It does not come under any pattern.
We have to wait and watch on what it would do in 2022.
After finishing talking about gold, it is natural that we talk about bitcoin next.
Bitcoin is continuing its great run.
It has gone up by 66% in 2021.
That 66% return did not come smooth. The price was so volatile that it had potential to give heart attack to many of its holders.
In 2021, bitcoin's price range was between $30,000 and $68,000.
If you got a strong heart to handle this kind of volatility, you could take some exposure on Bitcoin. But for others, just stick to index fund.
My return in 2021 is 8000%. Great return right? Yeah, I wasn't expecting this at all.
I am not talking about my portfolio return. But the subscribers growth % in investment insights channel.
This growth gives me lot more happy than the growth from my portfolio.
It is the happiness and satisfaction that I get from knowing that 4 - no, 4,000 folks getting benefits from this channel.
I have a small request for you all. What is the most important thing that you learn from this channel? Please share it in comments below.
Returns from my personal portfolio in 2021 is 33%.
My lucky streak is still running strong.
Everyone is super smart in a bull market. Only in a bear market do we realize our true self.
So don't get carried away. Humbleness is very important.
Else, market will teach us how to be humble.
This advice is not only for you. But for me as well. I reiterating this to make sure that sinks in my mind deep.
Let's leave 2021. It's done for. How about 2022? What can we expect in 2022?
I can predict a lot. If it happens as per my prediction, I can proudly announce that "I said so...".
If it doesn't happen? No problem. No one is going to remember our prediction.
We can forget that along with the crowd and move on to next prediction for next year.
This is exactly how many are predicting the market like a fortune teller.
I am not willing to join that crowd.
Anything could happen in 2022. It's well and good if the market goes up. Not a problem even if it goes down.
It's all part of the game. This is part of stock market investments.
We will soon meet again in another episode. Thank You.