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Things to keep in mind while investing in 2022

This post was first published on Moderninvestor.in

Financial Planning in the New Normal • 2022

Cancelled travel plans, volatile markets, rising inflation, and supply shortages that resulted from disrupted supply chains were some of the highlights this year. In 2022, governments will have to make strong decisions about whether to keep the economy running or the healthcare system running.

We all know how frustrating these past 2 years have been for all of us, and so, I will not be writing much about how it affected our daily lives, instead, I will focus on how we can plan for 2022 now that the virus seems to stay longer still.

As we start the new year, we are faced with shaky markets because of the consistent unpredictability caused by the pandemic. Pharma companies continue their race to develop solutions. There have also been promises that the booster shots will help combat the Omicron variant and

For tomorrow belongs to the people who prepare for it today

So how can we plan the year ahead? Well, to begin with, we will definitely have to keep in mind the risks (and opportunities) associated with COVID-19 since we don’t know for sure yet how the pandemic will take shape. Next, there is a huge risk of high inflation as governments across the globe have been pumping money into the system and keeping interest rates at record lows to keep the economy running.

I have only recently started taking interest in Commodities so I still have a lot to learn. Still, I think that some of the most essential commodities could could through supply/demand shocks and thus the prices would be volatile. Trading Options is a good strategy in this situation.

At the same time, there are many new technologies across industries that promise to increase productivity and bring in new opportunities to build upon. Business will vary a lot by sector. Travel & Tourism, for example, is one that has struggled the most these past years. However, the good news is that people really do want to get back to their normal lives, and once it is safe to do so, demand should surpass normal levels. Therefore, I think it is critical to lay emphasis of political actions on discrete industries.

Finally, Gold & Cryptocurrencies are going to compete with each other for the honour of “hedge against inflation”. Crypto, and blockchain in general, do seem to have applications in many businesses, however at the same time, we should be careful as the valuations of many of these digital assets, in my opinion at least, is highly magnified and there is a lot of hype and misinformation in this space.

Governments have also been doing a lot of planning behind the scenes and as we continue to learn about the virus and evolve with time, we can expect to see some big policy decisions that might have significant micro- and macroeconomic implications moving forward. Reports also suggest that governments have been testing their own digital currencies which will be interesting to watch.

With all this information in mind, let us start the year on a positive note, with hopes that life will go on normally and markets will stabilize. Happy 2021 everyone!


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