A disastrous capital market year so far: time to get in?

The capital markets have been a picture of horror this year. Whether you look at stock or bond prices, almost everywhere there have been significant price losses since the beginning of the year. Global equities, as measured by the MSCI World Index for industrialised countries and emerging markets, have each lost more than 17 percent in value, with technology stocks among the main losers with an average drop of 25 to 30 percent. Long-dated government bonds from Germany and the USA suffered losses of ten and twelve percent respectively. Cryptocurrencies such as Bitcoin or Ethereum have been underwater by around 40 percent since the beginning of January. And even the price of gold - a typical crisis currency - has barely budged since the beginning of the year.

The reasons for the falling prices are manifold: increasing economic worries, the war between Russia and Ukraine, China's zero-covid policy, high inflation rates and the central banks' more restrictive monetary policy play the main role. After the poor results caused by the capital market year 2022 so far, the question is what will happen next. Have prices already bottomed out, or what conditions must be met for the outlook to improve again? Our checklist for the next steps: