The Best Stock Markets in 2018 — and the Worst

Shares in an African country made the biggest gains in the year just ended. By contrast, the losers of the year should not be surprising.

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Who has followed the stock market news in the past year knows: The US stock market has gone well in phases, the emerging markets not so. It is all the more likely to surprise which country has done the best in the world: Annual Winner 2018 is — Malawi. The stock market in the Southeast African country has grown a considerable 47.7 percent in US dollars from the beginning of January to mid-December, according to figures from the US index provider S & P Dow Jones Indices.

Overall, equity investors were able to make the most gains in small emerging markets in 2018. Jamaica finished second, with a plus of 30.6 percent, followed by Qatar with 30 percent plus. Equities from Ecuador (+22.6 percent) and Saudi Arabia (+15.7 percent) also posted strong gains since the beginning of the year.

The worst stock markets

Among the stock markets, which ran the worst in 2018, unlike the winners, there are hardly any surprise candidates. The largest minus recorded with 42.8 percent was in Turkey. A full-blown economic and currency crisis and the erratic policy of President Recep Tayyip Erdogan led investors to flee a raft of Turkish stocks. The fall of 36.7 percent in Kazakhstan — the second worst market of the past year — was not so easy to predict.

In third place of the worst stock markets in 2018 is then again a little surprising candidate: Argentina, with minus 36 percent. Like the Turkish, the Argentine economy is in deep crisis. Investors are accordingly pessimistic and have deducted many chapters from the South American country. In fourth and fifth place are the Ivory Coast with 32.4 percent minus and Greece with an annual loss of 26.2 percent. Although the Greek economy has been showing solid growth for several consecutive quarters; the recession seems to have been overcome. Investors are apparently still suspicious of whether the upswing is permanent.

Emerging markets do not shuffle

Both the winners and the losers of 2018 are almost exclusively emerging markets. No wonder: Small stock markets are experiencing particularly strong swings, up and down. In the next year, the results can be completely different. However, the S & P figures illustrate what investment experts have been preaching for a long time: Investors should not shuffle the emerging markets. A diversified portfolio includes a diversified emerging market fund or ETF — even in those years when economic or political issues in individual emerging markets make the asset class unattractive. Investors should not limit themselves to individual regions such as Asia, Africa or South America. Winners and losers were around the world in 2018.

Author: Marko Vidrih

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