Stock market crash: my five biggest fears for 2022!

After a fantastic year for shares, what might trigger a stock market crash in 2022? Here are five possible sparks to burn investors’ fingers next year.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

2021 has been an outstanding year for global investors, with asset prices soaring to new highs. On Tuesday afternoon, the US S&P 500 index just hit a peak of 4,807.02 points, surging by 28.7% over 12 months. Barring the meltdown of spring 2020, the past three years have been a one-way ride for US shares and global stock markets. But as prices relentlessly rise, so too do my worries about the next stock market crash. Here are five possible triggers for a collapse in 2022.

#1. Covid-19

My top worry is Covid-19, the coronavirus that has ravaged our world for two years. We have endured the original virus plus five main variants (Alpha, Beta, Gamma, Delta and Omicron). That leaves plenty of letters of the Greek alphabet to name future variants. I hope that this tiny, self-replicating, mutating agent will become less harmful over time, as did the common cold. Otherwise, we could be in for another tough year — and perhaps another stock market crash?

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

#2. Irrational exuberance

The ‘TINA’ theory says There Is No Alternative to buying stocks currently. After all, near-zero/ultra-low interest rates mean that cash and safe bonds offer meagre returns. Thus, one way to boost returns is to take full-on equity risk. However, I remember pundits spouting similar messages (“This time it’s different”) in 1999 and 2007. Those years were followed by two huge stock market crashes. Today, like Warren Buffett, I’m fearful when others are greedy. It’s only during the next collapse that I’ll be greedy when others are fearful.

#3. Highly rated tech stocks

Remarkably, over half of the S&P 500’s gain in the past year came from just five stocks. These are mega-cap tech giants Microsoft, Apple, Nvidia, Alphabet (Google) and Tesla. These superstar shares have lifted the US market to repeated records. But what happens when these tech titans fall from favour? Could the decline of, say, sky-high rated TSLA trigger a stock market crash? I worry that it might.

#4. Inflation and interest rates kill growth

Thanks to rapidly rising inflation, the US Federal Reserve is tapering its bond purchases and will raise interest rates in 2022. In the UK, the Bank of England this month raised its base rate for the first time in three years. Steadily rising interest rates should eventually curb inflation, but could choke off next year’s recovery. With economic growth already slowing on both sides of the Atlantic, could slowing earnings growth trigger a stock market crash? Maybe.

#5. Geopolitical risks

Right now, there are 27 armed conflicts going on around the world. But I worry that three major geopolitical risks might trigger global instability in 2022-23. First, the West has unfinished business with Iran regarding the latter’s nuclear programme. Second, the China-Taiwan situation might boil over into armed conflict. Third, the same might happen between Russia and Ukraine, as we saw in 2014. I don’t see the first issue as too worrying, but the other two genuinely terrify me.

Finally, long experience has taught me not to fear stock market crashes. I’ll just keep doing what I do: buying lowly rated, high-yielding cheap UK stocks for the long term. If the market falls, at least I get my dividends. This strategy has served me well through five major market meltdowns since 1987!

Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices

Make no mistake… inflation is coming.

Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing.

Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question.

That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation…

…because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not!

Best of all, we’re giving this report away completely FREE today!

Simply click here, enter your email address, and we’ll send it to you right away.

Cliffdarcy has no position in any of the shares mentioned. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Alphabet (A shares), Apple, and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services, such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

A person holding onto a fan of twenty pound notes
Investing Articles

3 top dividend shares to beat a new recession

I believe that good dividend shares are my best approach to keeping my money safe in a recession. Here are…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Down 80%, this growth stock is a ‘no-brainer’ buy

Growth stocks have faced a torrid time recently. However, after falling 80% since its highs, this FinTech looks too cheap…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Warren Buffett is pouring money into stocks! Here’s a FTSE 100 pick I think he’d buy

Warren Buffett has been investing in several US stocks recently. Here's a FTSE 100 stock I think he'd also be…

Read more »

A Rolls-Royce employee works on an engine
Investing Articles

Is the Rolls-Royce share price on the verge of recovery?

A recent trading update showed the company is benefiting from increased flying hours, so will the Rolls-Royce share price soon…

Read more »

Girl showing thumb up, excited about upcoming shopping
Investing Articles

Is now a good time to buy Tesco shares?

After a strong rally last year, the Tesco share price has stalled. Roland Head gives his view on investing in…

Read more »

The BT Tower looming above London's skyline
Investing Articles

3 reasons to buy – and not buy – BT Group shares

The BT Group share price has a rock-bottom valuation right now. Is this a red flag or does it make…

Read more »

macro shot of computer monitor with FTSE 100 stock market data in trading application
Investing Articles

2 cheap FTSE 100 dividend shares! Should I buy?

These two FTSE 100 dividend shares offer terrific value for money, on paper. Should I load up on them today,…

Read more »

Cheerful young businesspeople with laptop working in office
Investing Articles

5 steps to target a monthly £300 passive income

With his eyes on a target of monthly passive income, here are five steps our writer would take to try…

Read more »