Khaleej Times - Was 2022 the year of the bear or the energy? A half-glass perspective

The year 2022 seemed like a rollercoaster for the markets, didn’t it?

It was the year we all realised that the glass is not only half-full or half-empty, but it's also refillable.

Many investors saw their portfolios being in red owing to the Russia-Ukraine war, ever-increasing inflation coupled with rate hikes and a general slowdown in growth.

However, if you had energy stocks in your portfolio, you would have been on cloud nine.

Major US stock indices tumbled in 2022 and suffered their worst year since 2008 while also snapping a 3-year positive streak.

The Dow Jones was down by approximately nine per cent, the S&P500 approximately by 20 per cent and the tech-heavy NASDAQ by more than 33 per cent.

The glass for the tech stocks may seem half empty as the big 5 in tech (FAANG) have seen their stock prices fall significantly in the past year.

Stock Name Return in 2022 (approximate)

Meta (Facebook) -65%

Amazon -51%

Apple -28%

Netflix -55%

Alphabet (Google) -39%

However, on the other hand, there was also a lot of "energy" in the markets. The S&P 500 energy sector, which comprises oil and gas giants like that of ExxonMobil and ConocoPhillips, was up 50 per cent in 2022.

If you had invested in these oil and gas companies, your portfolio would have been energised owing to the stellar run of such companies.

Stock Name Return in 2022 (approximate)

ExxonMobil 80%

ConocoPhillips 64%

Chevron 53%

Energy companies have started taking the Environmental, Social and Governance aspects of their business seriously as ESG investing has become a priority for several investors.

The Russia-Ukraine war is still waging, and inflation, even though reducing, is still not under complete control. These factors will play a key role in the battles between the bears and bulls.

The investment markets are like rollercoasters. There will be ups and downs, slow pace and fast pace and everything in between.

Just because 2022 was bearish for the markets, it does not mean the trend will continue forever. The same can be said for the energy industry.

So, whether you view the glass as half-full or half-empty, it's essential to focus on the long-term growth potential and make informed and strategic investments.

As investors and traders, our job is to keep an eye on the big picture and to adapt to the changing market conditions.

Just like philosophers say, whether the glass is half-empty or half-full depends on your perspective.

If you are an optimist, 2022 would have been half-full for you because you were able to grab onto stocks at lower costs.

If you are a pessimist, the glass would have been half-empty for you as you may have felt that price action may not have been in your favour.