Simion Kronenfeld: Will 2022 be a Bear Market?

The world economy has seen many changes in the past few years, and things largely remain fluid. Expert investors such as Simion Kronenfeld make and grow their fortune by watching market trends and adjusting appropriately. This leaves the big question that is on many investors’ minds: will 2022 be a bear market? While nobody truly knows the answer and how unforeseen circumstances might change things, experts can make very good guesses based on a few of the signals presented below.

Employment Woes

The COVID-19 pandemic forced many changes in the modern landscape, including drastically shifting the employment picture. While experts like Simon Kronenfeld who had the agility to adjust quickly to a changing marketplace managed to get through the pandemic relatively unscathed, not all business owners managed to keep their workforce intact. Many people found themselves forced out of the workforce due to childcare needs or early retirement. Employers have struggled to fill those gaps since. The forced time away left many adjusting their schedules and finances, resulting in many finding that returning to the workforce was simply not profitable for them. Combined with the millions worldwide who died from COVID-19, employers have not been able to fill empty jobs. Wages are higher than ever, but salary alone is not enough to lure new workers in.

Supply Chain Shortages

Furthering the ongoing economic issues, the world’s supply chain has been badly weakened by the pandemic. A global shift in how and what people purchased combined with a severe drop in workforce population means that many supplies which people used to take for granted have become scarce. This includes certain food staples, cleaning supplies, paper products, and much more. The alteration in available items and long delays in shipping times have caused businesses to change how they meet their day-to-day needs. This has a ripple effect through the marketplace as certain businesses that once had a guaranteed customer base have seen their reliable income cut unexpectedly short.

Russia’s Escalation

Early 2022 saw a continuation of escalation from Russia as the country made overtures of violence toward its neighbour Ukraine. This ultimately broke out into a full-scale invasion, which has the rest of the world reeling. In addition to a tragic loss of life and disruption of peace, the military movements by Russia likely have far-reaching consequences for the economy. Sanctions against the country have driven many prices up, including the cost of oil. While such actions are necessary in order to try to stop the terrible violation of freedom and happiness of the Ukrainian people, experts such as Simion Kronenfeld recognize the long-term effects on the market and are adjusting their holdings appropriately.

Bear Market or Correction?

One question on many investors’ minds is whether the downward trend of the stock market is a correction after consistent year-over-year rises, or if this is indeed a bear market. The former means that stocks will rebound in a few months, while the latter means that a major shift in investment strategy may be required. At the moment, signs point toward a bear market in 2022. However, experts like Simion Kronenfeld continue to look at bellwethers such as the performance of FAANG stocks that may indicate otherwise.

While a bear market is not a certainty in 2022, all signs point to it as a very strong possibility. This doesn’t mean that you have to lose money during the coming troubles. Investors like Simion Kronenfeld know that fortune is what you make of it; by preparing properly, you stand to maintain or even increase your wealth despite the potential bear market.