Even if the world market does not experience new shocks, it is not known whether the end of inflation will mark the beginning of a recession, warns Arvīds Jacikevičius, portfolio manager of the Lithuanian “INVL investment management and life insurance group”, adding that, despite this, there are interesting investment opportunities in the Baltics.
Before we start talking about what to do in the remaining eleven months of the year, I want to ask how 2022 was for the financial markets from your point of view. It seems that, in general, the Baltics did not fare as badly as the big markets.
Yes, it’s true, last year was not bad for the Baltic market, but here it is important what we compare with. For example, if we compare with the US market, yes, the fall in the Baltics was not so great, but if we compare with European stock exchanges, the fall is not so great there either, around 11-12%.
There is a big difference between the market of European developing countries and other regions. Due to the war, energy prices and other problems, this market fell significantly, even by a quarter. But we did better in the Baltics. This is due to the fact that the economy is doing better here, as well as the fact that we have very local markets and fewer foreign investors.
I think these are the main factors that affected the market in 2022.
Is it because money is invested here for the long term and we see less speculation and emotion?
Maybe. But I think that’s not the point. Most private investors act emotionally. A bigger reason, I think, is that investors are always more concerned about their foreign assets. If you are an investor from another country, you will first try to dispose of your assets in Poland before selling others. They don’t want headaches – the region is close to a war zone, we are selling, it doesn’t matter – good, bad company, good financial indicators or bad. Accordingly, we have relatively fewer such investors.
