Last year was a banner year for investors, with the S&P 500 racking up its third-best yearly performance in the 21st century.

For those keeping score, the benchmark index climbed 26.9%. Add in dividends, and the S&P 500 total return was 28.7%, powered by energy, finance, and large-cap tech stocks. But a peek inside those numbers reveals a market of haves and have-nots.

For the full year, Goldman Sachs found that a batch of just five stocks—Apple, Microsoft, Nvidia, Tesla and Alphabet’s Google—delivered 32.6% of all S&P returns. Such narrow market breath tends to be a sticky phenomenon, Goldman warns. Translation: Investors tend to ride the winners as long as they can, neglecting other promising areas of the market.

Sure enough, the year-end numbers showed the power of Big Tech on investor portfolios. The Nasdaq 100 gained 26.6%, and the S&P 500 technology sector gained 33.4%.

Overseas, the Stoxx Europe 600 gained 22.2% last year, a performance that beat out both the Nasdaq and Dow Jones industrial average. European bourses on January 3 started the year in the green with every sector in positive territory out of the gates. The caveat: Trading volume is light with London’s FTSE closed for the holiday; so don’t read too much into the promising start.

Further east, it wasn’t nearly so pretty last year. Chinese stocks took a hammering as Beijing cracked down on high-growth tech stocks and a volley of data revealed growth in the world’s No. 2 economy is beginning to slow.

Crypto, commodities, and coffee

To find 2021’s big winners, one need look no further than commodities and crypto. Despite a choppy December, Bitcoin finished the year up 66%. And, the king of alt-coins is up more than 400% over the past three years. But it cannot quite take the crown for Best Return of 2021. That honor goes to the humble coffee bean. Thanks to geopolitics, climate havoc, and COVID, futures contracts on coffee have been skyrocketing for the past year, up an astounding 76.3% in 2021.

The year ahead

As impressive as last year was, few if any on Wall Street are predicting a repeat performance for 2022. Goldman Sachs’s year-end target for the S&P 500 is 5100, a roughly 7% gain from today’s level. That’s one of the more rosy forecasts. Morgan Stanley wealth management chief investment officer Lisa Shalett says, “We expect the S&P 500 to be range-bound and volatile.” And BofA Securities has a year-end 4600 handle on the S&P, which would mean stocks will go backward this year.

A whole swirl of factors are complicating market outlooks in the year to come. They include more hawkish central banks, elevated inflation, and supply chain woes lingering at least through the first half of 2022, and the long odds President Joe Biden faces in getting his Build Back Better stimulus spending plan to pass in Congress.

Interest rates and tapering

There is growing consensus on Wall Street that the Federal Reserve will wind down its asset purchases by March and begin raising the benchmark lending rate at some point in the first half of 2022. Traditionally, value stocks (think financials) outperform unprofitable growth stocks in such an environment. Sensing this, investors already began bailing on many of 2020’s growth-stock darlings.

Inflation

At the close of 2021, inflation was running hot. That’s expected to continue at least through the first part of 2022. Supply chain snarls should ease, but elevated labor costs are expected to linger as employers deal with the tightest job market in memory.

That reality is bound to impact stocks. Goldman Sachs chief U.S. equity strategist David Kostin bluntly advises that “for 2022, investors should focus on stocks with high growth and high margins and avoid firms with high exposure to wage inflation.”

Build Back Never?

Infrastructure-, consumer-, and climate-related stocks could be in for a bumpy ride in early 2022, particularly now that the Biden administration’s $1.75 trillion spending blitz looks dead in the water. Goldman Sachs, for one, is banking on Build Back Better dying in Congress. That presumed defeat will hit likely economic growth as the consumer, the engine of the U.S. economy, will have less firepower to spend, spend, spend. It’s also likely to put a damper on one of the most surprising forces of the 2021 markets: the flush retail investor.

COVID

Omicron added a fresh dose of volatility into already turbulent markets in November. It's still too early to say how severe an effect the highly infectious strain will have on the global economy. Already, companies are compelled to rethink reopening plans, and the airlines have been canceling flights by the thousands. That’s rocking travel and leisure stocks and adding uncertainty to the larger “reopening” trade. “Omicron,” Deutsche Bank warned in a recent investor note, will “add to near-term headwinds.”