James and Mike see if their 2021 market predictions turned out the way they thought they would and make some 2022 predictions below:
Prediction #1 – We are at the bottom of the market now.
There is a chance that we’re at the bottom of the market. Depending on when you’re reading this, we’ve seen indexes drop between 15% – 25% over 6 months. That’s a significant drop. We’ve seen the Fed increase interest rates dramatically, however companies are still in quite good shape and employment is still extremely low.
Prediction #2 – Global supply chains are going to get worse.
The shock of COVID and the reaction by shipping and logistics companies has been catastrophic and they’re not even close to being back to where they need to be.
You’ll likely see some innovation in the space, probably from some tech companies moving into the space, you’ve already seen giants like Amazon plugging the gap and growing exponentially because of it. Companies will start to manufacture things closer to home and stop relying on a globalised network to provide goods.
Prediction #3 – Inflation is at the top
We’ve seen 6.9% inflation over 12 months. It wouldn’t be surprising if inflation hits somewhere between 7 and 7.5% and then slowly makes it’s way down to the long term average.
Prediction #4 – Elon Musk won’t buy Twitter
He’s put it on pause, because he knows it’s a terrible acquisition. The share price has dropped dramatically since he started this endeavour and he’s going to use any excuse to get out the deal.
Prediction #5 – House prices will plateau
We’re still experiencing high interest rates, inflationary pressures and I think those effects will linger and mean house prices will move sideways for the next two years.
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