Trends for 2022 highs & lows The - Welcome Srikanth Bhagavat

The
highs & lows
of 2021and the
Trends for
2022

Welcome

Srikanth Bhagavat
Managing Director &
Principal Advisor

The highs and lows
of 2021
Wishing all our readers a happy 2022 – filled with wealth, worth and
wellbeing. As is customary to review the year gone by and look into
the crystal ball for the coming year, here I go - again. The crystal balls
are harder to come by, but then I’ve got to try my best.
It has been two years of Covid, two very challenging years. It has
ruled our lives, ruined some lives, and we haven’t yet seen its back.
We have learnt some, unlearnt some, and not learnt some. A mixed
bag, that one.

                    Asset allocation ruled
                    Those who did not follow it rued. There was no
                    other way to have benefitted from the
                    unprecedented bull run. If you had let your
                    emotions get in the way, throwing asset allocation
                    by the side, you remained on the side. The Sensex
                    grew 21%; the midcap index grew 45% and small
                    cap index grew 58%. A bumper year.

                                                              All ain’t gold
                         Two very popular sectors, Banks and FMCG sorely
                              underperformed, gaining only 8% to 10% as a
                        category. Metals ruled with 69%. Metal fans did well
                          without hitting gold. Gold did not do diddly-squat.

                    Value stocks did show
                    their value
                    Globally, value stocks had their
                    place in the sun and those who
                    had some, had fun.

Inflation settled in
    With great ceremony, the US Fed omitted the term
‘transitory’ in their description of the state of inflation.
      Unemployment in the US was at its lowest ever,
    zapped economists called it ‘full employment’ and
   hastened to announce the end of low interest rates.

Direct paid well
Hexagon introduced Exchange Traded
Funds in our mainstream portfolios for those
who accepted ‘Direct’ as a way of life. And
the ETFs we chose? Naturally did well.

                                         One bad egg
            In some our international portfolios we had
          included China. Bad call. Big economy. Even
            bigger political agenda. Thankfully, it was a
                                       small allocation.

 Process won
 Looking at end of year league
 tables, Hexagon’s selection of
 funds did very well in every
 category. Process wins.

Trends & Recommendations
      Now that this century has reached adulthood, going
      from 21 to 22, what do we think will happen?

 Volatile

                       To use a run-down, worn-out cliché, “It will be volatile.” Oops.

Liquidity
                       Why? 2022 will see back of zero interest rates in the US. The Fed
                       has planned three increases in 2022 and two more in 2023.
                       Tightening monetary policy will likely put pressure on what has been
                       termed a ‘central bank bull run’ as it was driven by liquidity.

 Equity

                       From the position of more-than-fair valuations one should only
                       expect low-to-moderate returns from equity in the near term.

Mid-Cap
                       Underweight in small and mid-cap is likely to work in
                       your favor for most part of the year.

Geo risks

                       Be wary of geo-political risks (Ukraine-US/Europe, US – China,
                       China – South China Sea) and rising social unrest.

Trends & Recommendations
    …continued

Conserve

                 Remain conservative in your approach. No unnecessary risks are
                 warranted -meaning no leverage, respect debt funds, remain diversified.

Debt Funds       Debt funds? In a rising interest rate environment? Heavens be kind!
                 But we believe we have found the sweet spot that will continue to
                 give pleasure even when bond prices will be falling. It is that part of
                 the yield curve that has a high enough carry and can absorb price
                 drops and yet deliver better than a liquid fund. Carry on bonding!

  Direct

                 Add alternatives to the fixed income portfolio for spice. All available
                 in our ‘Direct’ portfolios.

Go Global
                 International investing will get even more comfortable with Hexagon
                 as it ties up with a partner who will provide a multi-currency bank
                 account as part of the package!

New New
                 And finally, we are going to have a brand-new platform to manage
                 portfolios- from reporting to transacting! To make life easier – for
                 you and for us J

Financial Planning

        Investment Management

        Family Office

        Estate Planning

        Risk Management

Talk to us to make
2022 count for you.

www.hexagonwealth.com
hexagonwealth@hexagonwealth.com
080 2657 2682