Every market context throws up winners. Winners don’t necessarily keep winning. New winners keep replacing older ones. This applies as much to mutual funds and ETFs, as it does to stocks. The winners of yesterday need not be the winners of today. For example, FMCG was a Big winner in 2020. 2021 turned out to be a different year for FMCG. Chemical stocks were big winners in 2021. Who knows what’s in store for 2022?
Winners keep coming and going through the revolving doors of the markets. Finding the next set of winners must now be our top priority. Sometimes winners may even emerge from recent losers.
Finding them is never going to be easy. We need to think beyond the present. We need to dispel the past and look at the future objectively. If we did all 3 then we could come up with some winners for tomorrow. Being wired to recency can only make us biased. This will certainly not help us find our winners. To bridge the distance between 2021 and 2022, we need to look very closely at what Mr. Market has been throwing away. What could superficially look like a pile of discarded stocks may very well be the winners of tomorrow. Be it Stocks, Mutual Funds, or ETFs, we need to find those winners and be prepared to participate in them.
2022 could be very different from 2021. The year might witness a sharp shift in the profile of winners. 2021 has shown us enough evidence of the same.