“We’ve seen one of the largest inflows of money into investments throughout 2021,” said Schonwetter. “We saw $43 million worth of assets going into ETFs and about $44 billion dollars flowing into mutual funds. So, people are absolutely saving.”
She suggested this group should look at selective, cautious investments to get more muted returns in 2022. They should especially look at high-quality businesses with good management, clean balance sheets, and goods and services that people need in daily life but have pricing power, so the companies can raise the prices to cover the inflationary cost of labour, manufacturing, and supply chains. But, she noted this group may also soon return to travel and entertainment, so accumulate less savings this year.
Debt aid for businesses
Depending on their income and industry, business owners were more negatively impacted by lockdowns. If they ran a hospitality or fitness business – like yoga studios or gyms – their cash flow has been extremely impacted by the pandemic, especially if they’ve kept paying rent, equipment lease contracts, or staff.
“If you’re running a business and you have a fantastic income, and you’ve been doing so for years, and all of a sudden it comes to a compete grinding halt, you have zero income coming in. Yet, you still have all the expenses going out,” said Schonwetter.
While many in this group have drawn on lines of credits, loans, and even personal debt to keep things afloat, she said they need to look at the total picture to optimize their assets.