Thoughts on 2021's global markets movements

Originally published on Jan 9, 2022

Among Asian stock markets in 2021, India stock market was the best performer. The worst performer was Hong Kong. HK's 3 major indices were down at the bottom. What goes down a lot will be added fuel for the next rally. Hang Seng Index has been trading below book value near the end of 2021. The low valuation will add energy to the bull market when it eventually returns. I do not know when the bull market will return but I am staying alert on Hong Kong's stock market in 2022.

Performance of major Asian stock indices ranked from best to worst

European stock markets performed superbly in 2021.

Performance of major European stock indices ranked from best to worst

None of the major European stock indices was negative. Most of them enjoyed double-digit gains and most of the double-digit gains were above 20%. 2021 has been a wonderful year for European bourses. In fact, it was the second-best year since 2009.

American stock indices also had a wonderful year.

Performance of major American stock indices ranked from best to worst

U.S indices had another wonderful year, although I hear plenty of grievances from investors who selected stocks outside of the indices. It was a terrible year for those who bet on 2020's growth stocks and sold too late or never sold. ARK Innovation ETF fell 24% in 2021 which explains why growth investors had a terrible 2021.

USD was a very strong currency in 2021.

Performance of USD versus other currencies ranked from strongest to weakest

Turkish Lira(TRY) depreciated 79.32% again USD. Everyone should pay attention to their country's currency. Singaporeans are lucky to be governed by competent people, so most of them do not worry about unstable home currency. If the currency depreciates like the way TRY did, the value of your assets and savings in the country will be decimated, even if the local assets are well-diversified. Some ownership of foreign assets will be good protection against a currency crash.

The strength of USD in 2021 made other major currencies like EUR(down 7.55%) and JPY(down 11.47%) look like emerging countries. I am surprised by Yen's weakness. It makes Japanese assets cheap. Perhaps I should also start paying more attention to Japanese stocks.