‘Decrypting’ 2021 and Looking to the Future

I know, most folks usually look at the Thanksgiving holiday as the time to reflect upon what they are thankful for and I don’t disagree with that; however, I find myself doing it more at the end of the year than when I’m stuffed with turkey.

This year has definitely been more challenging for trading than 2020 was, although it was a pleasant change to see life return to a little more normalcy. We still have a ways to go before we get back to pre-Covid life, if ever, but 2021 has been an improvement in that area. And the indexes seemed to enjoy the year, as well. As many have discussed, individual stocks struggled in many arenas, but the winners were big winners and did the heavy lifting.

Overall, I spent as much time in the crypto markets and non-fungible token markets, as I did in the stock market. It was much easier to find success there in speculative ventures. If I had to compare it to anything, it would be the special purpose acquisition company moves in the summer and fall of 2020. Granted, the NFT market has evolved so quickly, we’ve already gone through the SPAC like collapse of 2021, and it is on to something new. In 2022, I don’t anticipate that market to go away. In fact, I think it will offer some of the best speculative opportunities but also epic disasters.

Much of what we’re seeing in that market is simply adaptations and twists on what we see in the equity markets. The whole concept of drops, tokens, derivatives, and DAOs is eerily similar to dividends, spinoffs, partnerships and hedge funds, and things of that nature. A mint is simply an NFT’s version of an initial public offering. Now, people are buying teams rather than pictures of cartoon animals. I’ve talked about it as a digital country club, but many have evolved into full-fledged businesses. I understand if this market doesn’t fit your risk profile. It fits only the most speculative of risk tolerances; however, if your resigned to think of these markets as “right-click-save” or “Beanie Babies,” then you’re letting your bias cloud what is actually happening.

As we head into the new year, remember to keep an open mind and let yourself start fresh. Take the lessons of 2021 to heart, embrace your successes, and hold your head high no matter how you came out of the past year. Use the emotional freedom changing the last digit of the year provides. After all, we don’t get many emotional resets like next week offers.

Until next year, have a safe and enjoyable weekend.