An Everlake Review of 2022

By Marc Westlake

Published on: January 5, 2023

The year 2022 was marked by the emergence of inflation at levels not seen in decades.

Cryptocurrency fought for investor’s attention last year and, as we warned in our Guide to Investing in Ireland, things turned out as we anticipated with Bitcoin returning -63% in Euro terms.

Bitcoin Performance 2022

Stocks that were popular with investors during the pandemic lock downs had a terrible year in 2022, with Amazon, Alphabet, Apple, Tesla, Meta and Microsoft losing a combined $4.7 trillion in market cap.

Megacap Destruction

Source: Bloomberg

Interest rates around the world turned up sharply to combat inflation.

Euro Area Interest Rate

Source: Trading Economics

And whilst this had a positive impact on bond yields…

Postivie Bond Yields

…because bond prices move in the opposite direction to bond yields this resulted in the worst year on record for bond prices.

Nominal US Stock and Bond Returns

Source: Financial Times

2022 was the very worst 1-year return for Bond investors and one of the worst for Stock investors. When you combine this with inflation at 9% there really was almost nowhere for investors to hide in 2022.

A sliver of benefit for Irish investors came from the relative strength of the US Dollar to the Euro which meant that the US$ decline for the US market wasn’t quite so bad for an Irish investor in US Stocks.

Source: FE as 24/12/2022

At Everlake, we maintain a long-term investment outlook, however the market turbulence of 2022 was unnerving for our clients. We regularly discussed these fluctuations and offered reassurance.

During 2022 we also refined our range of values-based investment portfolio options, specifically designed to meet a strict set of objectives and match with client preferences and requirements. You can read more about these portfolios here.