Investing £1,000 in the UK’s 7 most popular investments since last year has been tracked through 2022.
January 12, 2023, LONDON – The US Dollar tops the Finder Investment Challenge in 2022, and it’s the first time in 3 years that Bitcoin hasn’t been the top pick.
Each year, the personal finance comparison site tracks the most popular types of investments from the previous year to see how they perform against each other.
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By investing £1,000* in the 7 most popular investment types from the previous year, the aim is to help you understand the risk associated with different approaches, especially given the unprecedented disruption to markets caused by the coronavirus.
Best Performers of the Year
If you had invested £1,000 in the US Dollar at the start of January, it would have ended the year at £1,118 (up 11.8%) and peaked at £1,246 on 23 September.
A very close second was Gold, which ended 2022 at £1,117. Gold, traditionally known as a safe haven when markets get tough, led the way from February to May at the start of the Ukraine-Russia conflict.
A turbulent year in the markets has resulted in a savings account proving to be the third best choice in the tracker. From January 2022, £1,000 invested in the best easy access savings account available on finder.com would have returned £1,011.53 (1.15%) by the end of the year. Savings rates improved over the year, but inflation also rose dramatically, meaning savers would lose money in real terms.
Duds of the Year
For the first time in the Finder Investment Challenge’s 3-year history, Bitcoin failed to top the leaderboard. In fact, it actually came to the bottom. The cryptocurrency lost a significant 61% of its value in 2022, leaving a £1,000 depositor on January 1st with just £387 by the end of the year.
Following a similar trajectory, Tesla narrowly lost, losing 56%. This would leave investors with just £441 after a year – a dramatic drop of more than 50% from 2021.
If you invested in the UK’s most popular fund, Fundsmith Equity or the FTSE, things would be a little better, but you’d still go down. Fundsmith Equity lost a significant 13%, sending a £1k investment down to £868 and the FTSE down 0.7%, meaning investors would lose around £7 (to £993).
Commenting on the findings, Matt McKenna, head of research and communications at personal finance comparison site finder.com, said: “All good things come to an end, and this proved to be the case for the bull run enjoyed by risky investments like Bitcoin and Tesla.
The big question on the minds of those with capital is whether they will return to the November 2021 highs. Both have shown the ability to bounce back, but the cryptocurrency market has recently faced serious headwinds and there are doubts. on how long the rapidly expanding Tesla can maintain its competitive edge EV industry.
“Over the previous 2 years, this tracker has highlighted the potential returns you can get if you’re willing to put your capital at risk, but 2022 has reminded investors of the benefits that come with safer options like savings accounts and index investing.
While riskier types of investments may reach previous highs, greater potential rewards come with greater potential risk, and there is a real possibility that they may not. You should not be fooled by the past performance of these assets and make investment decisions based on your risk appetite.”
The challenge tracks the price of: FTSE, Bitcoin, Gold, Dollar, Stock – Tesla, Fund – Fundsmith Capital, Savings account – Union Bank
For individual company stock and fund, we have selected the most popular options in 2021 according to Trading 212 and Interactive Investor. For the savings account, we have selected the most competitive exchange rate available on our site as of January 2022. All data is taken from the markets at the close of trading on Friday.
*The £1,000 is not actually saved or invested in these methods, it is simply used to show the performance of each asset.
finder.com is a personal finance site that helps consumers compare products online to make better informed decisions. Consumers can visit the website to compare utilities, mortgages, credit cards, insurance products, shopping voucher codes and more before choosing the option that best suits their needs.