So, which investment instrument gained the most value in 2023?
In 2023, investors turned to various investment instruments such as foreign exchange, gold, stocks, and cryptocurrencies. So, which investment instrument gained the most value in 2023?
Financial markets experienced volatile trends in 2023. The earthquake disaster in the first quarter negatively impacted domestic markets. In the second half of 2023, new economic policies and interest rate hikes dominated the domestic markets.
In international markets, the hawkish steps taken by the US Federal Reserve (Fed) to combat inflation raised recession concerns. However, towards the end of the year, the Fed pumping the brakes on interest rate hikes created a positive atmosphere in the markets.
WHAT HAPPENED IN FINANCIAL MARKETS?
In financial markets, the first quarter saw turbulent trends domestically due to the earthquake disaster on February 6, along with the impact of significant central banks’ hawkish measures against inflation and recession concerns caused by some bank failures internationally.
Global markets continued to focus on geopolitical risks heightened by the Russia-Ukraine War that began in February 2022, and the first quarter of 2023 saw interest rate moves by leading central banks worldwide and bank failures in the US and Europe.
In particular, the Fed’s hawkish steps during the year brought recession risk to the forefront. However, the Fed slowing down interest rate hikes towards the end of the year created optimism in the markets.
The Fed continued its interest rate hike cycle that began in March 2022 throughout this year. The bank raised interest rates to the range of 5.00% – 5.25% and kept rates steady in the November-December meetings.
FOREIGN EXCHANGE, GOLD, AND OIL
As a result of these developments, the dollar index tested about a year’s highest level at 107.3 during the year and then declined to 101.7, a decrease of approximately 4.2%, in the last quarter.
Starting the year at 18.73, the USD/TRY increased by 57% annually to reach 29.50. The Euro/TRY, starting the year at 20, traded at 32.6, reflecting a 63% increase.
The price of gold, which completed 2022 at $1824, surpassed $2145 in the last quarter of 2023, influenced by signals from the Fed that it would start reducing interest rates next year, reaching an all-time high.
Starting the year around $1827, the price of gold per ounce traded at around $2062 since the beginning of the year, with an approximately 13% gain. Gram gold, starting the year at 1096 TL, completed the year at 1960 TL, providing the highest return on investment with an increase of approximately 78% on an annual basis.
Starting the year at $80, the barrel of Brent oil, fluctuating throughout the year due to geopolitical tensions, ended the year lower due to concerns about a global oversupply despite production cuts by the OPEC+ group. Brent oil traded at $77.4 at the end of the year, with a 3.75% annual loss.
STOCK MARKET
The BIST 100 index, which experienced a volatile trend throughout the year, started to move downward after reaching its historical peak at 8,562.70 points. On an annual basis, the BIST 100 index on the Borsa Istanbul increased by 35.6% and closed the year at 7,470 points. However, when viewed in dollar terms, the index lost 14.1% for investors.
BITCOIN
In the cryptocurrency market, which was shaken by the bankruptcy of the crypto asset exchange FTX in 2022, there was a recovery this year.
Bitcoin, which completed the previous year at $16,542, saw an increase of over 170% by the end of 2023, reaching $44,700 compared to the beginning of the year, testing its highest level since April 2022. However, it later stabilized above $43,000.
