“One thing is certain: no one will look back fondly on investment year 2022.” This is what St. Galler Kantonalbank said about the invitation to a media breakfast the week before last. Is it really that safe? Really nobody? With Odysseus I could now say: My name is Nobody.
But I shouldn’t be the only one looking back fondly at an investment year of 2022. So are many other small investors: those who waited for a correction to stock up on stocks that were up 20 percent a few months ago.
Thomas Stuki – Head of Investment at St. Galler Kantonalbank. In terms of media orientation, he clarifies the statement at the beginning: he says that there was no such shock as the bankruptcy of Lehman Brothers in 2008. Losses in stocks were kept within acceptable limits. The correction in the bond market was more painful.
bonds? Does a retail investor like me have bonds in a portfolio? Himself to blame. I have repeatedly stated that private investors are not interested in bonds in the face of negative interest rates. This may be different for institutional investors such as pension funds and other large investors.
Yes, anyone who is measured by annual performance and has to justify it before a fund board or board of directors will not want to look back at an investment year of 2022. But for sure: small investors do not care about annual results. They should only be angry if they sold their shares after a correction instead of buying them and benefiting from lower prices.
Of course: he can go down again. You are never immune to a stock market crash. But if KB St. Gallen is right, then the signs are good. Economic activity is likely to recover in the second half of 2023, and equity markets will be looking forward to this recovery. St. Gallen is not alone in this assessment. This is mainstream.
What about inflation now? Isn’t this poison for the stock markets? The answer is yes. The problem is not inflation, but inflationary expectations. And especially badly rising inflation rates.
High inflation rates of more than 3 percent, which continue to rise, are unfavorable for stock markets. We saw it last year. But at high inflation rates, which tend to decrease, investors start buying stocks. This has largely been the case in the past, according to data analysis by British asset management firm Schroders. Today we have such a constellation: high inflation rates, which, according to observers, are likely to decrease, albeit slightly. “Inflation is not a killer criterion,” says Thomas Stuki.
Finally, a thought that couldn’t be more banal: it usually doesn’t turn out the way you think.