With the Oslo Stock Exchange about to knock its head on the roof, many stock fund clients have seen their investments so far this year – despite all the turmoil in the world.
Among those who, on the other hand, faced challenges on the exchanges this year, are Odin clients. Unit owners, such as in Odin Norden, have seen investments drop more than 20 percent since the new year. Odin Norden is a very popular fund in Norway. Folkefondet’s downfall is mainly due to the fact that the fund invests extensively outside of the Oslo Stock Exchange.
Half of the investments are in Sweden and more than 12 per cent in Finland – two countries where the business community has been hit hard by sanctions against Russia.
If possible, it would be much more difficult to predict the development of the stock market now than usual, says experienced investment manager Alexander Miller at Odin Forvaltning.
During wars, there is usually turmoil in the stock market at first, but now there is a risk of a nuclear crisis – how it is priced in the stock market, Miller wonders.
He adds that fear is not the only thing threatening the stock market, but that high inflation and low economic growth are not a vitamin pill to be reckoned with in the stock market.
However, despite the dark clouds, Miller believes that a 20-25 percent drop in the stock market presents a good opportunity To buy stocks – now as before.
Director of Investments Alexander Miller at Odin Management. (Photo: Per Ståle Bugjerde)
If you are uncomfortable with these fluctuations, you may have carried too many stocks on board. The advice remains long-term. Market timing is an exercise one is doomed to lose.
Doubts about the future stock
We have several funds that have had poor returns this year, says CEO Bjorn Edvart Christiansen at Odin Forvaltning.
It is no secret to anyone that Odin did not choose the valuable stocks in the portfolios as preferred investments or oil stocks. Without these kinds of stocks, it makes perfect sense for our funds to lag a bit so far this year, Christiansen continues.
He also believes that the turmoil in the markets led to last year’s winning shares being sold off, “of which we naturally had a lot” in portfolios.
Stocks in a company with greater visions for the future—realistic or not—than earnings today are often called growth stocks. These are compared to another category, stock value. Value stocks are distinguished by the fact that dividends are already there, and by the fact that they often offer fixed dividends.
The immediate interest rate cuts following the Corona outbreak led to massive interest in growth stocks, and the subsequent rise in prices. This is now overturned by an uncertain global outlook, as well as higher interest rates.
As expectations about benchmark interest rates in major markets began to rise last year, the popularity of developing stocks has fallen sharply. One of the main reasons for this is that profits in the far future will have less value today with higher interest rates.
Our funds have done incredibly well last year, and can also indicate high returns over the past three or five years, Christiansen says.
As he points to the Morningstar, who named Odin the coach of the year last year, he then adds:
– The fact that we are not in stakes with fully perceived value – Our long-term investment strategy is consistent and all about being long-term owners in sustainable quality companies. For us, these are companies with a strong market position, low debt and a high return on capital.
Christiansen stresses that Odin doesn’t invest in companies that don’t have a business model and consistent earnings — thus deviating from the popular perception of growth stocks.
Heavy stock market week in Europe
It was a tough weekend for stock investors on the Oslo Stock Exchange on Friday. It began in the hours leading up to the opening when Asian equity investors chose to sell stocks in large quantities, as a result of the fire at the largest nuclear power plant in Ukraine and the outbreak of Corona in Hong Kong. With that, the vast stock markets in Europe increased, and so did the Oslo Stock Exchange – which has been a very exceptional stock exchange since the outbreak of the war.
The main index ended its decline of nearly two percent on Friday.
Even with the sharp drop in the stock market on Friday, the main index is fairly close to the same level as it was two weeks ago. During the same period, the stock exchanges in Frankfurt, Paris and Stockholm fell by 12, 11 and 9 percent, respectively.
– We found a decline in the stock market in our funds, as Odin Norden owns a lot of Swedish shares and that explains the decline in this fund, says Christiansen.(Terms)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.
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