Forwarded this email by a friend? Subscribe here.
Since “well” is a tall ask during these difficult times, we hope this email finds you recharged, in good health, and with leftover holiday candy. Uncertainty still abounds as a new variant of the COVID-19 virus spreads rapidly across the world, but there’s reason to believe we’re in a better position than we were during the dark days of Delta.
Many young investors are entering the new year with a bit of swagger and confidence. All three major indexes (S&P 500, Nasdaq, Dow) gained around 20% in 2021, marking their third positive year in a row. Money rushed back into shares as vaccines were made at breakneck speed, and for the first time since 1995, the S&P 500 closed at new all-time highs 70 times. Every sector saw double-digit returns, with “Energy” and “Real Estate” leading. (Of course, eco-conscious funds missed out on some of those gains if they avoided fossil fuel companies.) It was the busiest year for IPOs since 2000. The collective value of all cryptocurrencies is nearing an eye-watering $2.5 trillion, having started 2021 at less than half that. Two popular assets that dipped in value were US bonds (-1.9%) and gold (-4.1%).
The equity comeback in 2021 has been great for many retail investors, and we’re not just talking about the GameStop believers who enjoyed a +600% return. As we discussed last week, the opportunities for investors focused on ESG, sustainability, and aligning their values with their investing have never been stronger. But experts say it’s time to lower expectations. Those who bear the scars from previous market rollercoasters will tell you this ride is the exception, not the rule. The major obstacles are the unpredictable pandemic, rising inflation, and the Federal Reserve reducing its economic support and raising interest rates. Sustainable investors will also watch closely as President Biden’s “Build Back Better” economic agenda hangs in the balance. Brace yourself and buckle up for a bumpy ride, including a possible correction. It’s 2022.
What we’ve been thinking of:
- CES, the biggest consumer electronics event in the world, kicked off yesterday in Las Vegas. Alongside eco-friendly gizmos, like a battery-free, mercury-free thermometer, previewing their new EV technologies are General Motors, Chrysler, Mercedes Benz, Sony (yes, the gadget maker has a car unit now), and Blink Charging. You can follow along here.
- A packaging giant that supplies the likes of Kellogg’s and Coca-Cola is replacing plastic with paper since green investing has “opened up a market worth more than $6 billion a year” for it.
- The European Union wants to put a “green” label on sustainably produced nuclear energy and natural gas in order to drive investment to these areas. South Korea just made a similarly controversial decision. With an energy crisis that doesn’t seem to be lifting, the climate transition is proving very tricky.