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Good advice is expensive: the year 2022 will bring losses for the majority of investors.
Ulrich Rotzingereconomic chief
Many exchanges closed with one of their worst results in years. “It’s just book losses,” one might say. At least for all those who did not have to sell shares out of necessity in the current year. Nevertheless, the sight of the depot statement is hardly a pleasure. There is currently little reason to hope for larger stock gains in 2023. Perseverance is required.
A look back: the German leading index Dax loses more than twelve percent over the year. The leading French index CAC 40 loses 9.5 percent. It was the worst result for both indices since 2018. Wall Street in the USA even experienced its deepest fall since 2008 in the 2022 trading year.
Deep red US indices: The Dow Jones lost around nine percent. The broad-based S&P 500 index fell about 20 percent and the Nasdaq tech index as much as 30 percent.
London Stock Exchange with Mini-Plus
The key Asian markets also lost ground over the year. The Hong Kong and Shanghai stock exchanges are both down more than 15 percent. Tokyo will record a minus of 9.4 percent in 2022.
Only on the London Stock Exchange did rising energy prices lead to an annual increase of 0.9 percent.
The explanation for the bad year for stocks? This is based on the increase in interest rates by the US Federal Reserve, the European Central Bank (ECB) and the Bank of England. The interest rate hikes are intended to curb rising inflation worldwide.
Craig Erlam, analyst from the trading platform Oanda, speaks of a “pathetic end” to a “miserable year on the stock exchanges”. 2022 was the “end of an era” of low interest rates. This has been replaced by “rising inflation and interest rates” as well as “huge economic uncertainty and the reorganization of energy markets following the Russian invasion of Ukraine,” Erlam said.
View of the Swiss stock market
“The era of cheap money is over,” is how the online bank Swissquote describes the past year in one sentence. A lot has changed within a year. The Fed’s interest rate hikes to combat inflation have gone much further than the majority would have dreamed, the commentary said. That is why the bear market phase – falling prices – was heralded shortly after the beginning of the year.
Numerous market participants are now assuming that at least the first half of 2023 will remain difficult on the stock markets.
The Swiss leading index SMI is deep red: Compared to the closing level at the end of 2021, the result is an annual minus of 16.7 percent.
On the last trading day (December 30, 2022), the shares of the major bank Credit Suisse held the red lantern among the blue chips, as is often the case this year. Many portfolio managers dumped the worst-performing standard stock at the end of the year. The price of the crisis-ridden big bank lost more than two-thirds of its value in 2022. And CS had already closed the overall strong stock market year 2021 with a minus of over 20 percent.
Zurich share lonely highlight
After Credit Suisse, the tech-savvy shares of Temenos and AMS Osram ranked at the bottom of the annual list of Swiss stocks, each with losses of around 60 percent. Lonza, Givaudan, Sika, Geberit, VAT, Partners Group and Straumann also fell back by more than 40 percent.
In addition to the insurer Zurich (+11 percent), only the shares of UBS, Novartis and Holcim ended the year with a positive balance.
Meanwhile, the two most heavily weighted stocks, Nestlé and Roche, can also look back on a weak year. Nestlé is about 16 percent cheaper, Roche even more than 23 percent.
In the broad market, Zur Rose, Addex, Obseva and Talenthouse are the whipping boys in the annual ranking with losses of over 90 percent each.
With an increase of over 125 percent and thus more than a doubling of the price, the building technology company Meier Tobler was the clear winner. (AFP/SDA/uro)