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- Investors were caught out by plenty of falling knives in 2022
- With prices still down, what makes a good value investment?
Contrarian investing is not for the faint-hearted. Warren Buffett is well-known for telling us to be greedy when others are fearful, but Nathan Rothschild reportedly went much further by advising investors to “buy when there’s blood on the streets”. The biggest bargains are on offer when there’s panic in the air – be it due to political turmoil, economic crisis or even war.
All three of these were ticked in 2022, and the sheer uncertainty that permeated a year to forget meant the quick wins available to investors “buying the dip” throughout a chunk of the 2010s never really materialised. The tech-heavy Nasdaq Composite index racked up some heavy losses in the first half of 2022, only to plunge again in mid-August and catch out those who may have opportunistically bought in. Similar scenarios occurred in many asset classes, including government bonds, where prices tumbled early in the year, throwing up some juicy yields that began to draw investors back, only for another fierce sell-off to strike later on.
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