It happens every year. Aside from making resolutions (eat healthier, exercise more), we also tend to make projections about what the year will hold.

That’s also true in the market, of course. In fact, our research team gathers together to make an entire report full of of investment predictions for the year.

We’ve talked about our own predictions a little bit already this year — and we’ll have more to say on it in a moment.

But as you know, we’re not alone in this… Analysts undertake this exercise, too, coming up with all kinds of projections and price targets for the year. As any seasoned investor will tell you, you’ve got to take these things with a grain of salt. There’s no such thing as a crystal ball when it comes to the markets. But still, analysts are paid to watch their assigned companies and industries closely, so it’s worth taking a look at these projections to see if we can glean any insight.

Let’s start with the big picture. According to FactSet, industry analysts believe the S&P 500 will rise to 5,225 over the next 12 months.

_{Source: FactSet}

Now, we should keep in mind that this projection came out last month. And a lot can change over the course of a year — not to mention in just a couple of weeks. But at recent prices, this represents upside of more than 14%. If that’s accurate, then that means it would be another great year for investors.

This projection comes from a bottom-up analysis of projections from sector analysts. It was calculated by taking the median price estimates from analysts at the company level, then aggregating by sector, in turn giving us an overall price target.

So aside from giving us a nice number to pin on the board, this analysis can offer some further insight into which areas of the market may offer the most upside. Let’s take a look at a break-down by sector…

_{Source: FactSet}

Looking at the chart above, we can see that the Communication Services (+22.0%) and Energy (+19.2%) sectors are expected to offer the most upside based on the difference between target price and closing price. On the flip side, Utilities (+6.2%) and Real Estate (+8.0%) are expected to offer the smallest upside.

As you look to rebalance your portfolio and look for new areas of opportunity, keep this analysis in mind. While last year was fantastic for most investors, nothing is guaranteed going forward. With the prospect of rising interest rates and a full-throttle rotation already taking place in the market right now, these sectors could offer some fertile hunting grounds this year.

---

Editor’s Note: For the rest of today’s issue, I’m going to hand things over to my colleague Jimmy Butts. But first, I have a question for you…

Do you invest in cryptocurrencies? Whether you do or not, we’d love to hear your thoughts. Good and bad.

Please send us your comments or questions here.

We’ve touched on crypto topics before. For example, you may remember one of the predictions we told you about in last year’s Predictions report was about Ethereum — which went on to gain about 400% after we wrote about it.

As Jimmy explains below, we think this new frontier of money is going to continue presenting incredible opportunities for investors in 2022 — and beyond. In fact, we have another big cryptocurrency prediction in this year’s report. So stay tuned…

---

Why It’s Time To Get Serious About Cryptocurrencies In 2022

My longtime premium readers know that I like to talk about the importance of keeping an open mind.

It’s easier said than done, of course, but I try to do my best. But the truth is that deep down we all have a tendency to quickly categorize. As we move throughout our day consuming information, working, experiencing… we’re making assessments. Passing judgment. It’s instant and reflexive.

When you meet someone, you immediately form a first impression. You might try to figure where they stand politically, morally, perhaps religiously. You quickly form an opinion about a person, even though you just met them.

Our brains are just wired that way. It helps us assess whether a person can be trusted, or whether they’re a threat. A long time ago in human history, when the stakes were a lot higher, it served us pretty well.

But today, those first impressions can be tough to overcome — especially when it comes to investing.

Today, if someone brings up an investment in Tesla (Nasdaq: TSLA), it’s sure to bring an immediate opinion. It might be good or bad, but the popular stock elicits a lot of emotion and assumed beliefs about the company.

Regardless of how hard we try to remain open-minded when it comes to investing (and life), we all have prejudices regarding certain stocks and industries. And it’s hard to change those beliefs. It feels like an admission of being wrong. Many stubborn folks would rather miss an opportunity to profit than change their mind about something.

If you can, I’d like you to keep an open mind with what I’m about to share with you today. Think of it as something of a confession. A few days ago, I shared this with my Top Stock Advisor premium subscribers. And just like them, I’m sure you have an opinion formed already on what I’m about to cover.

Just remember… Preconceived beliefs can often blind us to what could turn out to be a great investment.

My First Impression Of Bitcoin…

When Bitcoin began popping up in earnest in 2010, I shrugged it off. Thought it was a fad. Another tulip-mania.

Those beliefs hardened in February 2011. That was the date one Bitcoin was worth one dollar, a major milestone as the cryptocurrency reached parity with the world’s leading sovereign nation. (For the record, a $100 investment in bitcoin back then would be worth $4.2 million today.)

This is when I should have really begun studying and understanding bitcoin. But instead, I simply mocked it as a kind of digital tulip. A Ponzi scheme even. Sure, I looked into the technology behind bitcoin — the blockchain — and realized the potential there. But I still wasn’t convinced that bitcoin had a place in our future.

Then in 2017 the price of bitcoin really took off, racing from less than $1,000 to peaking at nearly $20,000 by year’s end.

The following year it collapsed to less than $5,000. The nostalgia — at least in the media — wore off. But as it fell out of favor with most investors and the media, I quietly began to look into it. I wanted to understand how and why so many people were willing to trust bitcoin and were eager to use it.

I read Satoshi’s white paper. I opened my first wallet, where I could invest in bitcoin and other cryptocurrencies. And I have invested — and currently own a variety of cryptocurrencies.

You see, my preconceived (negative) perception slowly changed. I was just slow to adapt to this evolving technology. I’m glad I finally got in. But you can see what might have happened if I had been able to change my mind sooner…

We’re Getting Serious About Cryptocurrency

If you’re one of the folks who cringe whenever bitcoin or cryptocurrencies are brought up, I want to encourage you to reconsider. Ideally, with an open mind. I even urge you to look into the technology yourself — doing so without assumptions.

Many times, our negative impressions about things are rooted in our lack of understanding.

I’m not going to dive deep into bitcoin and cryptocurrencies today. That’s not the purpose of today’s essay. But I will tell you that I will be covering cryptocurrencies more often. After all, I’ve been in this space personally for a little while now. So it would be doing a disservice if I didn’t share some of my experiences and knowledge with my readers.

Make no mistake, though… Over at Top Stock Advisor, our primary focus will continue to be finding and recommending wonderful companies that are trading at reasonable prices. In that respect, nothing will change. But I do hope to expose my readers (those who are willing) to the world of cryptocurrency. And if you haven’t already, I hope you’ll at least consider dipping your toe in the water, too.

I firmly believe that the value creation made possible by the blockchain has only just begun. And it will unlock enormous opportunities — opportunities that I feel obligated to share with you.

Make no mistake, bitcoin may be the most fascinating and controversial development in money and finance in generations… if not centuries. And the underlying blockchain technology has the potential to revolutionize aspects of our economy, upending many established companies — and even entire industries.

The only question is… will you keep an open mind and evolve? Or will you stand rooted in your first assessment of the technology and watch it pass you by?

Editor’s Note: I just released a BIG prediction about cryptocurrencies in my annual list of predictions for 2022…

If you read last year’s predictions, you know we told investors we were bullish on Ethereum — and it went on to deliver 400% gains.

My team and I predict cryptocurrencies will surge again in 2022… but the big winner won’t be Bitcoin, Binance, or Ethereum. We think another crypto is now a better bet for new investors. It is 321 times faster than its prime competitor and we think it could surpass it in value by the end of 2022.

Go here to learn more about this new cryptocurrency and the rest of my predictions now.