With all of the negative excitement of 2021, I doubt if there are many of us who are too sad to begin a new year with hopes of improvement. Given the effects of illness and rise of other uncertainties, I know that most of you would not have predicted such a strong rebound in the stock market. Let’s review those results and make some observations about 2022.

The Energy sector, whose demise is still being greatly exaggerated, led with a gain of over 46 percent. In second place comes Real Estate at 32 percent. I thought with everyone working from home, no one is supposed to need an office or commercial building anymore. The leading industry within Energy was Coal, up 138 percent. What?

Communications was dead last, rising less than 1 percent, followed by Healthcare at just less than 7 percent. Even the two parts of Consumer stocks, Staples and Discretionary, were weaker than the remaining 7 sectors.

The primary part of national wealth however is not stocks (equities), but fixed income holdings including bonds (debt). Those results were quite poor and if you have been a reader for a while, you know we expected this. The iShares Barclays Aggregate Bond Fund (AGG) is most often used as a representation of these positions. It fell in value during 2021 by 3.48 percent.

Even with interest and dividends counted, according to Yahoo! Finance, its total return was a loss of 1.67 percent, compared to a positive 7.42 percent in 2020. Thus, with interest rates having begun an upward trend, if you hold your existing bonds, you are likely to be losing money safely but steadily. The great bond bull market from 1981 forward may be finally over.

I will begin here with a prediction for 2022 because it should be the easiest. Interest rates will continue to rise and value of existing bonds will continue to fall. Inflation is here—even Jerome Powell, Fed Chair, has been forced to admit that transitory is no longer a valid description for it.

As more investors realize that bonds and bond funds paying out a few percent in dividends will not keep up with rising prices of double digits in housing and rental prices, bonds will lose their value at an increasing rate. I am not bold enough to predict official inflation reaching 10% again, but I would remind you that even good quality bonds lost up to 40 percent of their face value by the heights of the period of 1980-81.

Instead, I believe commodities will resume their upward trend of prices. One representative position is Teucrium Agricultural Fund (TAGS) which rose in value by 27 percent last year. Teucrium’s Corn Fund (CORN) and Sugar Fund (CANE) both gained over 35 percent. It is a wonder to me that both gold and silver actually lost value in the calendar year.

Since the Federal Reserve has placed itself in a strong box for 13 years of artificially low interest rates, I also predict that its raising of interest rates in order to finally recognize and deal with inflation will provide more than normal volatility in stocks and the stock market in general. Most of us do not voluntarily go onto roller coasters anymore and we do not like that ride in our investments.

But stocks of those high-quality companies that provide the goods and services we need and want the most will likely continue to rise, even if they lurch upward. Take some financial Dramamine and do not give up!