Ten months ago financial newspaper De Tijd published a list of the favorite Belgian stocks for 2008. The journalists contacted sixteen analysts and compiled a top ten list. The year is far from over but lets have some fun and see how bad (or well?) these ten stocks did since the start of the year (excl. the dividends):
1. GBL -36.54%
2. Dexia -72.43%
3. Fortis -95.11%
4. Omega Pharma: -39.51%
5. KBC: -64.48%
6. Umicore: -56.38%
7. Barco: -59.87%
8. Thrombogenics: -20.53%
9. Nyrstar: -84.92%
10. Agfa-Gevaert: -67.07%
Average performance (excl. dividends): -59.68%
Conclusion: If you had followed the advice from these analysts and bought these 10 stocks you would have lost almost 60% of your money. I forgot to include the dividends most of these stocks pay out, but even if you include these you would still have lost more than 50 percent of your money.
For comparison, the Bel20, which is the benchmark stock index of Euronext Brussels, lost 51.17% in the same timeframe. The Dow Jones lost only 33.27 percent since the start of the year, but losing a third of your money isn’t such a great performance either. Unless you were actively trading or shorting, one of the best investments of the year was probably cash.
I’m not sure how much interest banks pay around the globe but here in Belgium you could easily get 4-5 percent this year. It’s not great as the inflation spiked above those levels this year but it’s better than nothing. I’m mainly into cash right now but unfortunately I made the mistake of investing a portion of my money into the stock market in January and the months thereafter. I was too optimistic and didn’t expect the crisis would get this bad. I lost quite a bit of money but learned some valuable lessons in the process.
I’m not sure what the best investment of 2009 will be but I think those who start buying stocks of quality companies that offer value will be very happy within a couple of years. That’s unless you believe the financial system and the economy will totally crash. Then it’s probably best to stockpile food and buy as much gold and silver is you can. But I’m not that pessimistic