Global Investing

Who were the investment winners and losers in 2009?

December 30, 2009

Let’s not beat about the bush: the winners in this year’s investment stakes were those who cashed out early in the financial crisis, looked at hugely oversold stock markets in March and jumped back in. The losers were those who spent too much time thinking about it or, worse, thought it was a good idea to put all their money in Dubai stocks and  Greek government debt.

For the winners, it all had to do with market timing. Buying MSCI’s emerging market stock index at its March 3 low brought gains of close to 110 percent.  It was “only” a bit above 72 percent for the full year. World stocks as a whole gained around 30 percent for the year and nearly 75 percent from the March low.

Gold bugs grabbed a bit of the spotlight because of the record nominal highs for the metal. But with a gain for spot gold of around 24 percent, you would have done much better buying oil, which gained more than 75 percent.

Now for the losers. Two types, really — those who found themselves clobbered by a Black Swan (a surprise) such as the Dubai debacle and those who were too slow to recognise the market recovery.  Entering the global stock market at the beginning of June, for example, would have meant gaining around 22 percent — not bad, but a pittance of what was available  by taking the risk earlier.

There were also, of course, less mainstream plays that did well —  going long Sri Lankan stocks, for example. So what were your winners and losers?

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