The end of another year approaches fast.
As does the beginning of a new one.
In some respects, the calendar-year performance of the stock market is somewhat arbitrary. Stocks don’t know when the year begins and ends. Only investors know that.
Even so, as investors we often look at which stocks, indices, and even commodities performed best for the year.
So, which stocks, indices, and commodities came up trumps in 2016? Let’s take a look now. The results may surprise you…
In Australia, resources dominate. For that reason, it’s perhaps not surprising that resources stocks account for both the best and worst three performing stocks on the Aussie market this year.
Best Three ASX Stocks in 2016
Argosy Minerals Ltd — up 1,300%
Global Geoscience Ltd — up 814%
Hannans Ltd — up 750%
Worst Three ASX Stocks in 2016
Metminco Ltd — down 98.9%
Western Mining Network Ltd — down 97.2%
Metallum Ltd — down 95%
You would no doubt be pretty disappointed if you had put $5,000 into each of Metminco, Western Mining, and Metallum. That would have been close to $15,000 down the drain.
But if you had put even just $2,000 into each of the best performing ASX stocks, you would have more than made up for the losses.
Two thousand dollars in Argosy, would have turned into $28,000. The same amount in Global Geoscience would have become $18,280. And the same into Hannans, would have become $17,000.
All up, $6,000 spread across three stocks could have resulted in a $60,000 gain. Not bad.
Did any investor actually do that? You never know.
As for the best indices for 2016, we’ve measured the performance in US dollars. The runaway best performer is Brazil’s iBovespa index, up a whopping 58.1%.
And as you can see, another resources dominant market, Canada, also bagged a good return, up 21% in US dollar terms.
Best Three Indices in 2016
iBovespa — Brazil — up 58.1%
S&P/TSX Composite — Canada — up 21%
Dow Jones Industrial Average — US — up 14.4%
Worst Three Indices in 2016
CSI 300 — China — down 16.4%
FTSE MIB — Italy — down 13.2%
MEX IPC — Mexico — down 12.8%
On the downside, China’s market continues to be among the world’s worst. The Chinese stock market bubble burst in 2015. Unfortunately, it seems that all the air hasn’t yet come out of it.
After building up a slight recovery, China’s market has begun to slump again. It will turn higher again one day. As someone who’s deeply interested in the growth of China’s economy, we’ll keep watching it with a keen interest.
Finally, let’s check out the best and worst in commodities so far this year. Some of these commodities may surprise you.
The biggest winner has been natural gas. While all the headlines focused on the oil price rebound, natural gas has outperformed crude. The same goes for heating oil.
Best Three Commodities in 2016
Natural Gas — up 52.9%
Heating Oil — up 48.4%
Brent Crude Oil — up 45.5%
Worst Three Commodities in 2016
Wheat — down 15%
Corn — down 3.4%
Platinum — up 2.2%
On the downside, there really hasn’t been much that has gone down since the start of the year. Wheat is the biggest loser.
Of course, if we measured from the middle of the year, it could be a different story. As the markets looked forward to higher US interest rates, investors started selling commodities and buying US dollars and stocks instead.
The result has been lower commodity prices, including our favourite, gold.
So, that’s the breakdown for 2016. It looks as though 2017 won’t be any less crazy a year for investors than this year. Where should you invest? Which stocks? Which sectors and commodities?
As a speculation, we continue to like smaller resources stocks. And on the commodities front, it’s hard to look past gold and silver as long term investments.
However, all that said, we remain mostly bearish on stocks and the market. We’re not saying you should sell all your stocks, but certainly, before you buy another stock, you should check out what colleague, Vern Gowdie has to say about where markets are heading next.
Publisher, Money Morning
PS: Our colleague Callum Newman recently interviewed former News Corporation and Fairfax journalist Michael West.
You can hear the interview on Callum’s podcast, The Newman Show. As Callum told me, West talks about how newspapers are dead, business journalism is a joke in Australia, and no one takes on big end of town.
It’s sure to be an interesting episode.
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