2021 was another rip-roaring year for US indices, with some particularly notable events. Here we take a look back at some of the month-by-month highlights of a retail investor-driven market unlike any in history.
January 2021: AMC, GME, DOGE
Investors entered 2021 hesitantly wary of a market crash after a sensational run on growth stocks in 2020. Instead, the unexpected Reddit/wallstreetbets saga took hold and "meme stocks" were born. GameStop (NYSE: GME), AMC Entertainment (NYSE: AMC), Robinhood (NASDAQ: HOOD) and Dogecoin became headline news, setting the scene for the rise of the retail investor against institutions.
What became known as the GameStop short squeeze saw retail investors feverishly buying up shares in the ailing store. This led the institutions that were shorting the stock to have to buy back to cover their losses. These short sellers were squeezed out, sending shares in GME soaring. The trend caught on, and before long, AMC Entertainment, Blackberry (NYSE: BB), Palantir (NYSE: PLTR) and even Silver were all targets of a short squeeze effort by r/wallstreebets and like-minded investor groups.
February 2021: BMBL, TSLA, BTC
The Bumble (NASDAQ: BMBL) IPO generated considerable buzz as Whitney Wolfe Herd became the world's youngest self-made female billionaire and the youngest woman ever to take a company to IPO. The arrival of the dating and business connection app gave Bumble a $13bn valuation. Unfortunately, the BMBL share price has since plummeted over 53%.
Another big story dominating the headlines in February was Tesla accepting Bitcoin as payment for its vehicles. This came along with the company investing $1.5bn of company funds in the number one cryptocurrency.
March 2021 – NFT mania
NFT Mania took hold as non-fungible tokens became the latest digital craze to sweep the financial markets. Christie's auction house held its very first NFT auction allowing people to pay in cryptocurrency. The digital artist Beeple created a collage of his work, which he named "Everydays: The First 5000 Days". This NFT sold for over $69m in a sensational moment for the world of digital art.
Meanwhile, we noted the price of Iridium was soaring as supply shortages kept it elevated. Iridium is a derivative of platinum and palladium mining. It is used in spark plugs and the electrolysis process in generating green hydrogen.
April 2021 – COIN
The cryptocurrency exchange Coinbase (NASDAQ: Coin) went public in April via IPO. Coinbase has become a popular and easy-to-use online exchange for investors looking to dabble in cryptocurrencies despite some bad press. Coinbase has become a popular investment of ARK Invest.
Meanwhile, Bitcoin, Ethereum and other cryptocurrencies enjoyed a price surge in April.
May 2021 - BTC, TSLA
After rallying into May, Bitcoin and its crypto peers came crashing down later in the month. This included Dogecoin, which saw an all-time high of $0.73 on 8 May. The decline was partly caused by Tesla's about-turn in accepting Bitcoin payments, on the back of rising ESG concerns.
June 2021 – AMC
By June, AMC Entertainment had become the top-performing stock in America after rising an astonishing 2,230%. Thanks to the Reddit army of day traders, shares in AMC reached an all-time high this month above $72.
July 2021 – HOOD
The long-awaited Robinhood IPO finally took place in July with a valuation of $32bn. Unfortunately, HOOD stock is down 45% since IPO.
August 2021 – U, ZIM
Sprott Physical Uranium Trust (TSE: UU) enjoyed a rally in August on the run-up to a Uranium Price Explosion in September.
Shipping-container company ZIM Integrated Shipping Services (NYSE: ZIM) has risen 343% year-to-date as challenging supply chain conditions pushed container prices sky-high. After falling back in July, the ZIM share price soared through August, making this another popular story stock of 2021. ZIM was one of our Q4 stock picks.
September 2021 – WRBY, LAC
Affordable prescription glasses company Warby Parker (NYSE: WRBY) went public via a direct listing IPO to achieve a valuation of $6bn.
The Evergrande crisis began unfolding in China as the powerful real estate conglomerate defaulted on its astronomical debt pile.
October 2021 – Meta, Tungsten cube
Facebook (NASDAQ: FB) changed its name to Meta, officially embracing its Metaverse initiative.
The latest bizarre story to emerge from the crypto community was the sought-after Tungsten cube.
November 2021 – RIVN, SOL, KIND
After an insanely popular IPO, EV maker Rivian (NASDAQ: RIVN) quickly surpassed General Motors as the nation's second most valuable automaker. The Amazon-backed electric truck company had only delivered 150 vehicles to date, primarily to employees.
Nextdoor (NYSE: KIND) was another hugely popular IPO in November. The local social network went public via SPAC, achieving a valuation of $4.3bn.
The Solana crypto token price surged in early November but has since fallen 34%.
Jack Dorsey resigned from Twitter (NYSE: TWTR)
December 2021 – SQ, Elon Musk, TSLA, DOGE
Following in Facebook's footsteps, Square changed its name to Block to better represent its forays into the Blockchain arena.
Elon Musk is named Time person of the year.
Tesla begins accepting Dogecoin for merchandise.
Story stocks and other impressive price rises
Nokia (NYSE: NOK) has also been another unlikely winner in 2021. Its share price has risen 68% year-to-date. We wrote about the potential for a Nokia share price rebound back in April, and sure enough, it soared through to July. Since then, it's fluctuated but remains elevated overall.
Story stocks don't necessarily produce the best stock market returns, so let's also consider some of the stocks that have produced the best returns since the turn of the year.
The top five performing stocks of the S&P 500 are:
Devon Energy Corporation (NYSE: DVN) 174%
Bath & Body Works (NYSE: BBWI) 154%
Moderna (NASDAQ: MRNA) 146%
Ford Motor Company (NYSE: F) 144%
Marathon Oil (NYSE: MRO) 143%
The top five performing stocks on the NASDAQ are:
Destination XL Group (NASDAQ: DXLG) 1,955%
Lightwave Logic (NASDAQ: LWLG) 1,715%
Aemetis (NASDAQ: AMTX) 424%
Avis Budget Group (NASDAQ: CAR) 526%
Cassava Sciences (NASDAQ: SAVA) 510%
Meanwhile, Cryptocurrency attracted more money in 2021 than all previous years combined.