The R Year

Farewell to a very challenging year

2022 wasn’t the easiest of years to handle for investors. Exceptionally high food price inflation, only surpassed by even higher energy price inflation, led to a cost-of-living crisis in many countries, and it is far from over yet. On top of that, a special military operation in Ukraine (Putin has advised me not to call it a war) brought what we Westerners typically call war back to mainland Europe after years of relative calm and prosperity.

As if that wasn’t enough, COVID-19 just wouldn’t go away. Neither would many of the supply chain problems we have suffered from. And, to add insult to injury, property prices started to weaken worldwide, and rising property prices have been a major part of the foundation underneath the bull market we have enjoyed more recently.

Therefore, it should come as no surprise that it has been a very poor year for equities in most countries. In no particular order, the DAX index in Frankfurt delivered -12.35%, the CAC 40 index in Paris -6.60%, the IBEX 35 index in Madrid -2.02%, the FTSE 100 index in London +4.57% (!), the TSX Composite index in Toronto -5.75% and the Nikkei 225 index in Tokyo -7.38%.

However, of the major equity markets around the world, by far the worst performing ones could be found in Shanghai, Seoul and New York. All those markets were down about 20% or more with the NASDAQ index being the ultimate ‘winner’, as it delivered a 2022 return to investors of -32.51%. The stock exchanges in Shanghai, Seoul and New York are all heavily exposed to tech. When you take into account the very poor performance of tech worldwide in 2022, one shouldn’t be that surprised to learn that these equity markets did particularly poorly last year.