Supply & demand
In 2021, we got a true picture of how supply and demand work in the real world when one outpaces the other. Supply chain kinks caused by a lingering pandemic, labor shortages, and maybe a ship that was stuck in the Suez Canal for a week, combined with some pent up, angsty consumer demand fueled by extra savings and government stimulus to create a perfect recipe for shortages, and yet another reason for price increases.
The great resignation
Most recent data shows that Americans had been resigning at a record rate of 3%, or 4.5 million, in November. 1.6 million people have joined an anti-work subreddit, some are evaluating job alternatives in the metaverse, and more are shifting their work to a remote setting. Labor shortages remained an issue in specific industries, yet we’ve just simultaneously reached a shallow unemployment rate of 3.9%. Something must be up, right?
The Bottom Line
There are many potential takeaways from the economic events of 2021 that it’s difficult to discern between them. Nevertheless, the bigger picture might be the fact that none of us knows what tomorrow holds, and the world as we know it can begin to shift below our feet at any given time, having rippling consequences on everything around us.
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Gamestop might be the big name associated with meme stocks, but it brought along a lot of friends with it. Stocks like $KOSS, $NAKD, $AMC, $EXPR, and others benefited from the meme stock movement, seeing stock prices fluctuate considerably during 2021.
Meme Stocks: How it all started.
The S&P 500 has brought an average return of approximately 15.7% over the 5 years between 2016 and 2020, but in 2021, the famed index was up 28%. The Nasdaq and the Dow also boasted quality ROI on the year in what seemed to be a historically great time to be invested.
Large caps stole the show
After the meme stock jubilee in early 2021 and a haircut over the next few months, small caps have had a tough time overcoming their newfound stigma in conjunction with fears of contractionary policies coming soon.