Global stocks lost over 18% in 2022, Barclays Global Aggregate Bond Index decreased by 14%
Aa
Share
Turkey was the best-earning stock market in 2022. In the US, energy stocks went up in price and growth stocks fell out of favour. 2022 has not been a good year for stocks or bonds. It was downright devastating for a 60/40 portfolio (60% stocks, 40% bonds). It was the worst year for risky assets since 2008.
A disastrous year for the 60/40 portfolio
The global stock market fell by -18.2% in 2022, according to Lazard Asset Management. Interestingly, emerging equity markets showed a slightly better result (-17.8%) than the US stock market (-18.1%). Let's note that taking into account the inflation rate of over a dozen percent, it was really difficult to protect capital in 2022.
Stock Market Returns in 2022
Source: Lazard AM
Bonds also performed badly. According to the aggregated Bloomberg index , they became cheaper by -16% . Barclay's Global Aggregate Bond Index fell -14%, posting its worst year ever. Hence, it is no wonder that the 60/40 portfolio recorded the worst result in the last… 100 years! It is reassuring that such a disastrous year, historically speaking, promises many years of much better results. What was wrong was about to happen.
Portfolio performance 60/40 on an annualized basis
Source: BoAML
Rates of return on selected assets in 2022
Source: BlackRock
When it comes to individual markets, it was possible to earn the most and the easiest in Turkey. The BIST100 index grew by 197% in 2022. It was significantly ahead of the Argentinian MERVAL (142%), and the Chilean IPSA and several lengths (22.1%). Interestingly, only 7 more national indices ended 2022 above the mark, usually showing a result of around 3-4%, including the Brazilian and Indian indices.
When it comes to the world's worst indices, it's no wonder that Russia's MOEX (-43%) is at the bottom of the list, because Russia is a country that has started a long-unseen war in Europe, and has been burdened with gigantic sanctions that hit its mark. economy and struggling with the flight of valuable human capital. However, in the penultimate place, the Nasdaq index dropped by as much as -33%. Composite , grouping technology companies listed on the American stock exchange.
USA: energy and value prevail, growth technology in disgrace
When it comes to American indices, the one grouping industrial companies turned out to be the strongest, as it fell by only -8.8%. The S&P500 index fell by -19.44%, and its companies lost USD 8.2 trillion in capitalization. When it comes to sectors on the US stock market, only two ended 2022 above the mark, with the energy sector definitely standing out (+59%), while the utility sector grew by a modest +1.6%.
US indices in 2022
Source: CNBC
US indices performance
Source: S&P Global
Now let's look at returns, excluding small caps. Most last year capitalization was increased by the ExxonMobil fuel company , by as much as 80%. McKesson, a company distributing medical equipment, did almost as well (+50%). Among the biggest losers are the cryptocurrency exchange Coinbase (-86%) and Meta, the former Facebook (-64%). It is worth taking a look at the table below showing how much capital hated technology companies in 2022.
S&P500 companies with the largest loss of market value in 2022
Source: Visual Capitalist
Consequently, value companies (low-valued companies from traditional sectors, boasting regular profits and often paying dividends) performed much, much better as assets in 2022 than growth companies (growth companies, most often technology companies). The relationship between the result of the S&P Value index and S&P Growth was the largest to the detriment of growth companies since 2000.
S&P Growth vs. values
Source: Bloomberg/Edward Jones
