{"id":9857,"date":"2021-09-20T16:17:58","date_gmt":"2021-09-20T16:17:58","guid":{"rendered":"https:\/\/zackspcg.com\/blog\/?p=9857"},"modified":"2022-02-26T13:05:37","modified_gmt":"2022-02-26T13:05:37","slug":"3-lessons-for-investors-from-the-past-year","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/3-lessons-for-investors-from-the-past-year\/","title":{"rendered":"3 Lessons for Investors from the Past Year"},"content":{"rendered":"\n<p>As we fast approach the end of 2021, I\u2019ve been taking time\nto reflect on some of the lessons I\u2019ve learned over the past year. In 20 months\nor so, the world has undergone a slew of rapid-fire changes, and it has\nresulted in significant \u2013 and I would argue, lasting \u2013 shifts in the way we work,\nhow we live, and how we interact. I think this period in history will be\nremembered for how it catalyzed many of these changes. <\/p>\n\n\n\n<p>With that in mind, I\u2019d like to use this week\u2019s column to\nmemorialize four big takeaways I\u2019ve had since the beginning of 2020. <\/p>\n\n\n\n<p><strong>Lesson #1: The\nChallenges of Global Synchronized Reopening<\/strong><\/p>\n\n\n\n<p>When the global economy shut down for weeks in the spring of\n2020, the effects were largely obvious to most market-watchers \u2013 a sharp recession\nwas inevitable. What many economists did not fully anticipate, however, was how\nchallenging a globally synchronized reopening would be. <\/p>\n\n\n\n<p>To this day, a semiconductor shortage continues to stall auto\nproduction, with orders backing up six months in some cases. I\u2019ve written many\ntimes about supply chain entanglements, which have sources in many places \u2013\nfrom factories in Malaysia to ports in Los Angeles. To boot, many service\nsector businesses are having difficulty finding workers, which only adds to\ndelays and price pressures. <\/p>\n\n\n\n<p>__________________________________________________________________________<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2021_09_20&amp;content=stock_market_outlook_report\">Are You Prepared For Any Future Market Changes?<\/a><\/strong><\/p>\n\n\n\n<p>The first half of\nthe year brought many challenges, but also lessons to investors. For those who\nare looking for a long-term financial outcome, are you prepared for continued\nchanges ahead?<\/p>\n\n\n\n<p>I want to remind\nyou about the importance of keeping an eye on economic indicators as opposed to\ntiming the market. This may be difficult to do especially in times like these, but\nthat\u2019s where we can help!<\/p>\n\n\n\n<p>In our just-released Stock Market Outlook report, we provide\ninsight on how to focus on the facts and hard data. This report contains some\nof our key forecasts to consider such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><em>Zacks rank S&amp;P 500 sector picks<\/em><\/li><li><em>Zacks view on equity markets<\/em><\/li><li><em>What produces 2021 optimism?<\/em><\/li><li><em>Zacks forecasts for the remainder of the year<\/em><\/li><li><em>Zacks ranks industry tables<\/em><\/li><li><em>Sell-side and buy-side consensus<\/em><\/li><li><em>And much more<\/em><\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!\u00a0<br> <strong><br>IT\u2019S FREE.\u00a0<a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2021_09_20&amp;content=stock_market_outlook_report\">Download the Just-Released September 2021 Stock Market Outlook<\/a><sup>1<\/sup><\/strong><\/p>\n\n\n\n<p>__________________________________________________________________________<\/p>\n\n\n\n<p>Perhaps the most visible and tangible effects of the globally\nsynchronized reopening have been in commodity prices, which many readers know has\nhit everything from nickel to copper, to lumber and aluminum. All told, the\nproducer price index for all commodities has soared past pre-pandemic levels \u2013\na trend that is squeezing profit margins for producers and resulting in higher\ncosts for consumers. <\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/2_pic1-5-1024x395.png\" alt=\"\" class=\"wp-image-9858\"\/><figcaption> <strong><em>Source: Federal Reserve Bank of St. Louis<sup>2<\/sup><\/em><\/strong> <\/figcaption><\/figure>\n\n\n\n<p>I continue to believe the current imbalances in the global\neconomy \u2013 where demand firmly outweighs supply \u2013 is a temporary issue that will\nresolve itself in time. But truth be told, it\u2019s taking longer than I expected.<\/p>\n\n\n\n<p><strong>Lesson #2: Hybrid\nWork is Here to Stay<\/strong><\/p>\n\n\n\n<p>I would argue\nthat the \u2018old normal\u2019 of commuting to the office five days a week was slowly,\nbut surely, changing even before the pandemic hit. Many large companies offered\n\u2018work from home\u2019 days and exceptions could be made for employees who needed to\nwork remotely for special situations. A hybrid work model was developing \u2013 but\nthe pandemic catalyzed it into being the new normal.<\/p>\n\n\n\n<p>Studies are\nstarting to emerge that may help corporations navigate the issue. A recent\nstudy of 30,000 U.S. workers found that working from home around one day a week\nwould boost productivity by 4.8%, with a significant part of the one-off\nincrease coming from reduced commuting time. The relief of not having to go to\nthe office may also provide a boost of happiness and energy to more vigorously\nand creatively work on the day\u2019s tasks. <\/p>\n\n\n\n<p>Another study\nfrom the University of Chicago\u2019s Michael Gibbs, however, found that workers at\nhome were more susceptible to domestic distractions like childcare and errands,\nand the report also noted that people working from home may exaggerate productivity\nin an effort to maintain the privilege.<sup>3<\/sup><\/p>\n\n\n\n<p>The hybrid\nmodel appears to be the happy medium, and corporations will likely spend the\nnext few years gathering data on how to best structure the new approach. For a\ncompany like Google, for example, the early idea is to have employees in the\noffice three days a week, with the ability to spend two days \u201cwherever\nemployees work best.\u201d<\/p>\n\n\n\n<p><strong>Lesson #3: Remember\nHow Fast the Market and Economy Can Move<\/strong><\/p>\n\n\n\n<p>A few months ago, the Bureau of Economic Analysis officially\nconfirmed that the 2020 pandemic-induced recession ended in April 2020. Since\nthe recession started in February of that year, it meant the economic downturn\nlasted all of <em>two months<\/em>. As it were,\nwhen the recession was officially declared in June 2020, it was already over! <\/p>\n\n\n\n<p>The stock market also moved with extraordinary quickness.\nBefore most people even had time to wrap their heads around what the pandemic\neven was, and what it would mean for the future, the stock market had already\nposted a bear market and a v-shaped recovery. In six months, the market priced in\nthe recession and the economic recovery that followed. <\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/1_pic2-4-1024x395.png\" alt=\"\" class=\"wp-image-9859\"\/><figcaption> <strong><em>Source: Federal Reserve Bank of St. Louis<sup>4<\/sup><\/em><\/strong> <\/figcaption><\/figure>\n\n\n\n<p>I have written before that event-driven recessions and bear\nmarkets tend to be sharper on the downside and shorter in duration than\ncyclical or structural recessions. But the Covid-19 recession and bear happened\nwith unparalleled speed, and I think it\u2019s fair to say that any investor who\ntried to time it likely got it wrong. To me, this is a good reminder that the\neconomy and markets often work faster than many expect, and trying to time\ninvestment decisions over such short horizons can be a flawed approach. &nbsp;<\/p>\n\n\n\n<p><strong>Bottom Line for\nInvestors <\/strong><\/p>\n\n\n\n<p>The global pandemic is far from over, and the U.S. economy\nis far from running smoothly again. But I think the three lessons detailed\nabove will be lasting takeaways from this period of economic history \u2013 they are\nobservations we can remember and learn from, and perhaps apply in the future to\nunderstand change while avoiding mistakes. <\/p>\n\n\n\n<p>In addition to these lessons, we also recommend staying focused on long-term financial success. Keeping an eye on economic indicators and hard data that can positively impact your investments is a good start. Our\u00a0<strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2021_09_20&amp;content=stock_market_outlook_report\">Just-Released September 2021 Stock Market Outlook Report<\/a><sup>7<\/sup>,<\/strong> will give insight on how to do this!<br> \u00a0<br>This report is packed with newly revised predictions that can help you base your next investment move on hard data. For example, you&#8217;ll discover Zacks\u2019 view on:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><em>Zacks rank S&amp;P 500 sector picks<\/em><\/li><li><em>Zacks view on equity markets<\/em><\/li><li><em>What produces 2021 optimism?<\/em><\/li><li><em>Zacks forecasts for the remainder of the year<\/em><\/li><li><em>Zacks ranks industry tables<\/em><\/li><li><em>Sell-side and buy-side consensus<\/em><\/li><li><em>And much more<\/em><\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!<br><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The pandemic and economic disruption aren&#8217;t over yet, but here are some valuable takeaways from the past 20 months<\/p>\n","protected":false},"author":3,"featured_media":8874,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[63,71],"tags":[],"class_list":["post-9857","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitch-on-the-markets","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9857","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=9857"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9857\/revisions"}],"predecessor-version":[{"id":10307,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9857\/revisions\/10307"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=9857"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=9857"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=9857"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}