The good, the bad and the ugly

It's inevitable to take stock of what this year was in terms of market performance and the effect it had on investors.

The good: Markets once again delivered very good returns. Global stocks rose 21% in dollars, fixed income between 2% and 9% depending on risk profile in the same currency, while in Chile the IPSA reaches almost 9% return and bonds rose more than 10%, both in pesos. Finally, the exchange rate has risen more than 12%, pushing foreign assets even higher for a local investor.

The bad: Geopolitical conflicts that, far from diminishing, grew and intensified during the year. To the Russia-Ukraine war was added the conflict in the Middle East between Israel and Palestine/Iran, just to name the main ones. While the market did not register a relevant direct impact, apart from some increase in oil price volatility, the humanitarian consequences have undoubtedly deepened in a regrettable way.

The ugly: The operational/regulatory noise that some financial products have faced regarding erroneous valuations and/or outright fraudulent behavior in local funds has revealed additional risks in the industry. Simplicity and understanding what you invest in is fundamental.

The year now leaving us had its ups and downs; a correct investment policy and discipline should allow you to benefit from years like this one and protect yourself from declines in more challenging years.

This column was originally published on December 17 in [LINK]