No investor is going to forget 2021 anytime soon…
To kick off the year, the market was flipped on its head – stocks gained international attention after a handful of retail traders gathered together to try to beat several hedge fund managers at their own game.
Members of the popular Reddit community r/WallSteetBets went all-in on stocks like GameStop, AMC, and Upstart. What resulted was a shift in the power dynamics between retail traders and the Wall Street establishment forever.
And that was just the beginning of 2021. Investors saw everything from surging crude oil prices to all-time highs in used car and new home sales. Recently, investors watched the stock market tumble due to fears surrounding the potential impact of the Omicron variant.
While no one has a crystal ball, experts like the ones at Money Morning LIVE can draw on their experience of past years to make educated, actionable predictions about the future.
As we move into 2022, we talked to eight top investing and trading experts from Money Morning and Money Morning LIVE to see what they think are the most important investing trends to follow. We also asked for tips and market strategies investors can use to find financial success in the coming year.
Let’s dive right in.
1. Shah Gilani: Investing & Trading in 2022
Shah Gilani is Chief Investment Strategistfor Money Morning. His financial pedigree goes all the way back to the founding of his first hedge fund in 1982 at the Chicago Board Options Exchange. He is considered one of the world’s foremost experts on trading and investing.
Shah is also editor of Total Wealth and The Money Map Report, in addition to other financial publications. Shah is a frequent guest on CNBC, Forbes, and MarketWatch and features on FOX Business’s “Varney & Co” every week.
Drawing on four decades of trading and investing expertise, Shah predicts you’ll need to keep your eye on three main areas in 2022:
Inflation isn’t just about how much consumer or producer prices are rising – it’s the sum of critical components, including supply and demand, for everything in an economy. From the supply chain to goods and services, to wages and consumer expectations, and other components, they’re all interconnected, and the sum of all that manifests in interest rates.
“Each component is in play today in a way they haven’t been individually or collectively for decades,” says Shah. “We will see many of the component pieces of inflation explode and implode in the quarters ahead and move and shake markets in the process.”
Retail investing, Shah says, is “the tail wagging the dog – and the dog is Wall Street.”
“Retail momentum buying, buy-the-dip Pavlovian reaction-function buying, options buying, and, lately, ‘YOLO’ dart-throwing on meme stocks and hot potato narrative plays will shape what happens to most stocks, and markets in general. The sheer number and younger age of these new investors, who play by their own rules and who will be around for a long time, will be a huge factor in the markets of 2022.”
Shah wants us to imagine China as the “other” head of the two-headed giant straddling the world economy. This other head has got the sniffles.
“The world’s going to see how important China is to global trade, economies, and markets.” – Shah Gilani
He reminds us China hasn’t had a depression, Great Recession, or even so much as a meaningful slowdown in four decades. He also highlights how debt has been the “secret sauce” for China’s growth all along.
Shah believes a reckoning is coming sooner, not later, and he thinks the domino-effect downfall will play out like this…
“On the outside, China seems to be the dragon of legend come to life. But underneath what you find are actors holding up an elaborate dragon costume.”
2. Michael A. Robinson: Defense & Tech Investing in 2022
Michael A. Robinson is the Director of Technology Investing at Money Map Press. Michael is also a regular editorial contributor for outlets like Money Morning, Fox Business Network, CNBC, Bloomberg Radio, and The Street.com. He’s a Silicon Valley veteran whose areas of expertise are defense and tech investing.
“With inflation at a 39-year high amid a tight global supply chain, a number of tech shares sold off pretty heavily at the end of 2021,” said Michael.
When asking Michael about the future of tech stocks overall, he said, “I’m looking for a rebound in the sector, especially in the second half of the new year. We’re likely to find solid strength among large-cap tech leaders.”
That’s because large-cap tech leaders have the global power and reach to pass on price increases in a way that smaller firms can’t match. As inflation news continues to dominate the headlines, small caps as a group rolled over in early November and are trading below their 50-day moving average – a key support level.
Even though we have the new Omicron variant rapidly gaining ground, Michael suggests avoiding the obvious “COVID plays” like Zoom Video Communications Inc. (ZM) and Teladoc Health Inc. (TDOC) in 2022. Both are more than 55% off their previous highs.
Instead, Michael would focus on firms that have strong pricing power and great moats. Apple Inc. (AAPL) remains a main pick for 2022 because of its growing service business, high margins, and the relative safety of a mega-cap that fund managers essentially must buy.
In the chip space, Michael still recommends Nvidia Corp. (NVDA) because its high-speed graphics processors are integral to fields like AI, electric vehicles, and the burgeoning world of the metaverse.
“For 2022, Microsoft (MSFT) will continue to benefit from the growing use of cloud technology. With renewed concerns about COVID, millions of workers will continue to pursue remote only or hybrid work schedules that will keep cloud technology at the forefront as it was through all of 2020 and 2021.” – Michael A. Robinson
3. Danny Brody: Cannabis Investing in 2022
Danny Brody is the co-founder of Eat Well Investment Group and the Cannabis IPO Expert at Money Morning. He’s also affiliated with the National Institute for Cannabis Investors (NICI), a nationally recognized cannabis investing research group, where he recently published a video series where he discusses several other cannabis investing predictions for the new year.
Danny predicts that 2022 will be a year of consolidation for the cannabis industry. The market is experiencing a plateau with little to no margin for revenue, but some intriguing and potentially lucrative distribution models are likely to emerge as companies try to connect with consumers.
In 2022, Danny predicts companies that “build a consistent product, build authentic brands, and gain [consumer] awareness” stand a good chance at performing well. He sees an opportunity for cannabis to grow into a $30 billion industry if this framework is established.
“Budtenders,” he predicts, will continue to play an increasing role in cannabis sales. If budtenders can back the brands they love, they can shape consumers’ buying preferences. So, brands that educate budtenders can reach their target market and turn leads into conversions. Danny predicts that will be a big step on the road to a $30 billion cannabis sector.
Two interesting elements of the market he predicts will rise in the industry are cannabis beverages and cannabis tech. Danny says this will spring from a need for companies to “be more innovative to grow.”
4. Nick Black: Crypto Investing in 2022
Nick Black is Chief Crypto Strategist at Alternative Wealth Daily and a crypto trading host on Money Morning LIVE.
Here’s what Nick predicts about the curve of crypto coin prices in 2022 – he has some other predictions about the crypto space, too.
For starters, Nick thinks 2022 could be the year for a “spot price” Bitcoin exchange-traded fund (ETF), although a big hurdle has yet to fall. See, financial institutions must own shares of the underlying assets for an instrument to be a true ETF.
And while some, like Bank of America, are slowly dipping their toes into the world of cryptocurrencies, “bundling” of crypto assets has kept some big institutions from jumping in headfirst. For a real ETF to work, the players need to be invested in Bitcoin itself – anything else isn’t worth the investment.
Nick believes the NFT space will continue to thrive in 2022 and, because so many of them use the Ether blockchain, Nick sees Ethereum reaching $12,000 this year (it was up 983% in 2021). So long as investors and collectors buy NFTs, there’s considerable upside potential in Ethereum. Cardano will continue to grow in importance in the year ahead, with Nick predicting $15 spikes in the “green” cryptocurrency.
Here’s a look at Nick’s complete list of coin price predictions for 2022:
- CPRX – $1.25
- BTC – $150,00
- ETH – $12,000
- ADA – $15
- DOT – $250
- ALGO -$25
- MATIC – $12
- VET – $0.50
- ATOM – $200
- NEAT – $85
- FLOW – $50
- FET – $15
- SDAO – $40 OR 0.10
- AGIX – $25
“For crypto, it’s all about use, utility, and value.” – Nick Black
5. Chris Johnson: Quantitative Trading in 2022
Chris Johnson is the Quantitative Specialist at Money Morning and CEO at Johnson Research Group. His expertise is in quantitative analysis and trading, and he recently launched Penny Nation, a penny-stock trading research service. He also hosts regularly on Money Morning LIVE, where he shares industry foresight like these predictions for 2022.
Quantitative trading is a market strategy that relies on mathematical and statistical models to identify or execute opportunities. Since Chris is well-versed in quantitative trading, he can best speak about the changes over the years.
In many ways, 2021 has reminded Chris of 2006: Stocks have similar resiliency and leadership signatures – and the same potential risks – as they did back then.
Interest rates moved from about 1% in 2003 to over 5% in 2006, although it was the end of a cycle, not the beginning. Since we’re at the start of a cycle this time around, Chris predicts interest rates will likely become a catalyst for market headwinds in 2022. It’s something we’re already seeing in the small-cap markets.
Chris is predicting that COVID repercussions will continue to be felt in the first half of 2022 – although he’s optimistic about its declining relevancy in Q3 and Q4. Regardless of what happens, Chris thinks that the ship has long since sailed on “pandemic trades” like Peloton Interactive Inc. (PTON), Zoom Video Communications Inc. (ZM), and Chewy Inc. (CHWY).
“‘Reopening’ trades will ultimately prevail, especially among travel industry players, come springtime,” says Chris. “The rocky end of 2021 tells me that 2022 is a year to be ‘choosy,’ sticking with the leaders and shorting the laggards.“
Chris encourages traders to remember to stay nimble but stick with developed trends.
He suggests considering plays on sectors like transportation, housing, REITs, clean energy, and semiconductors.
Chris talked about how he thinks the over-the-counter (OTC) market and
penny stocks under $5 are going to continue experiencing the boom they’ve seen over the last two years.
“Technology, credibility, and opportunities are bringing more investors into this previously taboo segment of stocks – just like the options market 20 years ago.” – Chris Johnson
6. Brian Mitchell: Angel Investing in 2022
Brian Mitchell joined the Angels and Entrepreneurs Network as Director of Deal Flow in June 2021. In early 2021, Brian, the consummate entrepreneur and founder, sold and exited Bright Greens Inc., where he quickly grew the business into over 2,000 stores, with significant distributors and partnerships with Whole Foods and Kroger.
Brian focuses on startup and angel investing and has the following predictions to share moving into 2022.
Brian thinks there are countless exciting innovations emerging across several industries into 2022 and beyond. The ones that stand out at present are robotics, space, clean energy, ag-tech, medical tech, and of course, crypto. We also see AI and blockchain features built into every company where they could apply.
Brian mentions that companies are scaling down technologies for individual use in clean energy – options like affordable, stackable batteries for use to power several homes or single appliances in an outage, wind turbines that fit in your yard, and solar panels on your window blinds.
Brian points out several innovations in med tech around early detection, from cancer screening innovations to blood-sugar testing without drawing blood.
In the realm of space, there’s been an explosion of companies solving a myriad of near-Earth space-related problems like getting a Wi-Fi internet connection miles above the Earth and reducing the weight of everything through materials innovations – even 3D-printed rockets.
“The pace of innovation in all industries is exponential, and there could not be a better time to invest in startups.” – Brian Mitchell
7. Andrew Keene: Options Trading in 2022
Andrew Keene is the CEO and President of AlphaShark Trading and a nationally recognized expert in options trading. Of course, you can also catch Andrew as a regular contributor on Monday Morning LIVE. Naturally, his 2022 predictions come from the viewpoint of an options trader:
Andrew believes the beginning of the new year will bring some real challenges for the market. Ultimately, he predicts the market will go lower to begin the year. “But in doing so, it will give us an incredible opportunity to get bullish, go long with some options, and take some big profits,” said Andrew.
For options trading, Andrew believes in keeping an eye on the moves big institutions make constantly… but never advertise publicly. But because options can turn on dime, it’s an investment strategy that requires agility and quick decision making. It helps to use tools that point out the exact trades that the largest institutions in the market are throwing their money down on.
“In my experience, the market going lower almost always leads to buckets of money flowing back into the market as institutions scoop up big, discounted positions to the upside.” – Andrew Keene
You can join Andrew regularly on Money Morning LIVE.
8. Mark Sebastian: Volatility Trading in 2022
Mark Sebastian is Volatility Specialist at Money Morning and the Chief Investment Officer at Karman Line Capital. As a regular contributor to Money Morning LIVE, he often guides his viewers to big profits in choppy markets.
Mark predicts volatility will bring some big changes to the markets of 2022, and the most successful investors or traders will be the ones best able to move with volatility.
“Tech seems to dominate the market every year,” Mark says. “But 2020 and 2021 were especially good to the big tech names like the FAANGs – Facebook Inc. (FB), Apple Inc. (AAPL), Amazon.com Inc. (AMZN), Netflix Inc. (NFLX), and Google (GOOGL) – after COVID forced everyone inside the walls of their home.”
With the introduction of the Omicron variant, and the optimism surrounding its potential end to the pandemic, 2022’s market will be different.
Mark doesn’t think the new year will be so kind to the FAANGs or to the QQQs – the nickname the pros have given to the NASDAQ-tracking Invesco QQQ Trust. The stay-at-home trade is in trouble in the coming year, while the “reopening trade” – which will boost stocks listed among the Dow Jones Industrials – may come to dominate.
Omicron aside, inflation has become a serious risk to the economy, especially after wholesale price numbers increased by 9.6%. This is the highest level since November 2010.
“And names like FAANG are more sensitive to inflation, and to interest rates, than people realize,” Mark claims.
Fortunately, Mark says, it’s never been easier to profit on the massive forces impacting groups of huge stocks. He recommends using simple, liquid index ETFs. In view of his own predictions, Mark has his eye on the SDPR Dow Jones Industrial Average ETF Trust (DIA).
Naturally, when it comes to individual stocks, Mark’s watching the industrials – producers of aluminum, copper, and oil like Alcoa, FCX, and XOM. These are companies that tend to thrive in inflationary environments.
“The NASDAQ can’t be on top forever. And 2022 is the Dow’s time to shine.” – Mark Sebastian
Making 2022 a Profitable Year with Money Morning LIVE
To quickly recap – here’s what investors need to know to maximize their profits in 2022:
- Inflation and China: Both of these will present peril for the markets but also lucrative opportunities for investors attuned to what’s happening.
- Technology: Mega-cap tech stocks won’t outperform, but they’ll offer safe havens. Semiconductor stocks will do very well. Be ready to jump on opportunities from electric vehicles (EVs) and the “Metaverse.”
- Cannabis: 2022 will be a year of consolidation for the next leg higher. Companies that develop innovative products and strategies for connecting with consumers could outperform.
- Cryptocurrency: Watch for a “spot” Bitcoin ETF, and look for big gains from coins like Cardano and others on the Ether blockchain.
- OTC Small- and Micro-Cap Stocks: The overall market trends of 2022 will strongly favor these tiny, power-packed shares. Explosive gain potential is there.
- Angel investing: Startups seeking to develop and market scaled-down tech products for individual use will offer huge opportunities for early-stage investors.
- Options Trading: Shadowing trades from huge institutions will work even better in 2022. Look for chances to go long and be bullish in the second half of the year.
- Volatility: The mega-cap tech stocks that crushed markets in 2020 and 2021 will slow down, as inflation begins to benefit “classic” industrial stocks found on the Dow.
These predictions will help get you started on the road to wealth in 2022, but you’re going to need real-time, actionable trading and investing ideas every day the markets are open. You can get it free atMoney Morning LIVE. Tune in to watch and chat in real time with our experts and other like-minded folks, and you’ll have your best shot at banking big profits in 2022.