Bitcoin And Nasdaq Are The Worst Performing Assets In 2022, But There’s Still An Opportunity

The first month of the second half of 2022 is over and the market deactivation has not yet eased.

Meanwhile, the ISM manufacturing index is set to be released today, August 1, with expectations at the lowest since May 2020. The likely prolonged slump in the US manufacturing sector could signal that business investment and spending on consumption will slow down.

In addition, job creations and wage growth have been slowed and more recent movements have been reported. Amid the continuing challenges of running for the markets in 2022, Mohamed El-Erian, president of Queen’s College, University of Cambridge, tweeted on July 31, a snapshot of asset performance year-to-date (YTD) versus the previous two years.

Advertising

In short, most asset classes in 2022 were in the red, expected by Bitcoin (BTC) and the Nasdaq index, losing -48.60% and -20.80% respectively. Meanwhile, the correlation between Bitcoin and the Nasdaq index recently hit an all-time high. Oil has been a relative outperformer, gaining more than 31% year-to-date, largely due to the war in Ukraine, while commodities, in general, have traded choppy in 2022.

GmGlN8GeUg7vaa3YWNJ47
Performance of the main indices. Source: Twitter

Modest returns

The shift made by the Federal Reserve (Fed) in its policy of reducing financial conditions and reducing weighted liquidity on equities, in particular the most speculative ones; yet most earnings reports so far have shown some form of growth with downward revisions to discounts due to high uncertainty.

This complex interplay between tighter financial conditions, high inflation and lackluster US corporate earnings could continue for the rest of the year. In turn, that could mean modest returns for investors, as growth projections could be slashed by companies looking to an uncertain future.

Some opportunities

Despite the negativity in the markets, there could be some opportunities for value stocks, as they tend to be cheaper in downturns, and if inflation continues to be high, historically value stocks tend to do better. interpreter. Likewise, growth tech stocks, the more established names, posted strong earnings, which markets rewarded with less frantic trading and reduced discounting.

Additionally, as the performance of the UK’s FTSE 100 shows, there could be opportunities in Europe and the UK for stocks that have not kept pace with their US counterparts.

Overall, market participants have had a volatile year so far, but it is possible that it will continue, so sticking to a defined investment strategy might be the best decision to make this year.

Buy stocks now with Interactive Brokers – the most advanced investing platform


Disclaimer: The content of this site should not be considered investment advice. The investment is speculative. When you invest, your capital is at risk.

Leave a Comment