The past 24 months have delivered multiple gut punches: a pandemic that hit us in 2020 and the second wave that unleashed havoc in 2021, unprecedented global lockdowns, social unrest in various parts of the world, the dramatization of Brexit, and a vituperative U.S. presidential election.
The climate crisis too took a catastrophic toll across the globe. Hurricanes, fatal floods across continents, deep freeze in Texas, wildfires, drought, rain in Greenland, and global warming on the Arctic.
This period was also marked by the shortest bear market, a ferocious bull run, volatile trading sessions, and the crypto-mania.
Since the end of year naturally lends itself to introspection, I reached out to non-anonymous, FinTwit influencers across the globe. Of course, the selection is biased; I gravitated towards the handles I personally like and whose tweets I enjoy.
My question to them was: What was your biggest learning of 2021? To those I approached last year, I have carried their 2020 responses alongside.
One said that it was "the dumbest market he has ever experienced in his life." He preferred not to get quoted. Here are the responses, presented in alphabetical order, with the names linked to the respective Twitter handle.
Anupam Gupta, Investment Research Consultant
2020: No one knows anything; Twitter knows everything.
2021: My biggest lesson of the year has to be humility – humility in accepting that all of us have our limitations and most of what we know to be true is, at best, a guess.
Ben Carlson, Ritholtz Wealth Management
2020: This year has reinforced the need to stay humble when dealing with the financial markets. Even if you knew what the headlines were going to be heading into this year it still wouldn't have helped you predict what was going to happen in the markets.
2021: This year has reinforced the fact that sometimes the world is often a crazy place and most people are just trying to survive. So give people a break, be nice and try to put yourself in someone else's shoes before trying to make a judgment about them.
Ben Johnson, Morningstar
I came into 2021 knowing nothing lasts forever, but I learned that some things last much longer than you might expect. For example, euphoria has helped markets to escape the gravity of fundamentals (for now) and set them on a course into uncharted territories.
The fact that someone paid $650,000 for a non-fungible token of a yacht in the metaverse really drove this lesson home for me. But it also taught me to at least try to be more open-minded and think a bit more in terms of possibilities than probabilities.
Is it possible that JPEG of a yacht is worth something? Yes.
Is it probable? I don’t think so, but it could find another buyer at a higher price before it sinks to the bottom of a digital sea.
Brent Beshore, Permanent Equity
2020: It has made me appreciative of the sharpening of difficulty and the solace of rest. Both have a vital role to play in sanding down our rough edges and helping us grow into a better version of ourselves.
2021: It taught me patience. In a world of striving, seeking, and attempting to gain, there’s riches in waiting well.
Expectations are the most elastic thing in the universe. Without awareness and constant calibration, expectations grow to where happiness is elusive and bad decisions become attractive. Comparison is often the fuel for expectations.
Patience is waiting on proper action in light of reality, and without the desire for what others have.
(Also, if you read this, please send me something I can buy ASAP.)
Christine Benz, Morningstar
2020: This crazy year has given me a bit more time for introspection. One thing I've been thinking and learning about, is making mindful allocations of time. We spend so much energy talking about how people should allocate their financial capital, but less on how to allocate time, even though it is finite and, therefore, more precious than financial capital. Ideally, we could all use this very peculiar period, when activities have slowed down and we can't do many things we love, to take stock of which activities we miss most and which we don't miss at all.
2021: My biggest financial lesson of the past year is that doing nothing often beats doing something. Coming into 2021, I thought stocks were quite overvalued; it seemed that most sane market watchers were saying that a correction in U.S. stocks was imminent. Yet thanks to a combination of laziness, being busy, and skepticism about market-timing, I stuck with my generally hands-off policy for my portfolio. I continued to make contributions to my retirement accounts and non-retirement accounts, and adhered to a generally equity-heavy mix. As Jack Bogle once quipped, "Don't just do something, stand there!" is often wise advice.
Douglas Boneparth, Bone Fide Wealth
The year 2021 has taught me that no matter how much you think something should happen in the short-term, whether based on history or your gut, the opposite is always a possibility. It stressed the importance of remaining focused on the long-term and the things that are in your control. Doing so will almost always save you time, energy and money.
Muthukrishnan Dhandapani, Investor
2020: Understanding the past does not provide us with the ability to predict the future. The pandemic at the start of the year, and the vaccination by the end of the year – both were completely unexpected. The stock market crash in March caught us unaware and so did the subsequent dramatic recovery.
The future would always be full of surprises; both good and bad.
2021: The year reiterated the fact that gains are always lumpy. None of us foresaw this kind of return. The markets will always surprise, both on upside and downside. Staying invested is the most sensible thing to do, rather than play the in-and-out game.
Human resilience, as is evident over the pandemic, is wonderful and heart-warming.
Nicholas Maggiulli, Ritholtz Wealth Management
2020 taught me what the late Jack Bogle once said: “Nobody knows nothing.”
2021 can be summed up with: "The market can stay irrational longer than you can stay solvent."
Rachel Robasciotti, Adasina Social Capital
The big 2021 lesson for me is how deeply interconnected we all are. The pandemic continuing to rage on worldwide has demonstrated both how much we need each other and that when we think only of ourselves, the broader communities we live in suffer. Progress comes when we see each individual's full humanity, listen intently to the communities most impacted by the challenges we wish to solve, then act accordingly. I hope that 2022 brings both hope and action in that regard.
Sumaira Abidi, TV anchor
2020: To live in the moment, have fun, not worry about what comes next.
2021: It taught me to never get too dejected when sad or too excited when happy. When the second wave hit, we thought life would take forever to return to normal, but normalcy was restored surprisingly fast. And just when we thought the good times would keep rolling on, we are staring at a possible third wave. The year 2021 has truly taught me the value of emotional agility.