70% of Investors Lost Money in 2015 - With Details on the Best and Worst Performing Assets

If it were easy to make money, everyone would be doing it. And no, we do not expect that pearl of wisdom to make you feel better about that bet on the Azerbajani manat or NYMEX heating oil futures. JL

Heather Long reports in CNN/Money and Julie Verhage reports in Bloomberg:

U.S. markets had their worst year since the financial crisis.
People who did make money did one of two things that most investment books and advisers tell you NOT to do.
1. They held a lot of cash.
2. Or they took on a lot of risk.
CNN/Money

Nearly 70% of investors lost money this year, according to Openfolio, an app that allows people to track their investment performance and compare their portfolio with other users.

U.S. markets had their worst year since the financial crisis. No wonder making money was tough.
"While the S&P 500 is on track to end 2015 almost exactly where it started, earnings have deteriorated," says Matt Coffina of Morningstar.
People who did make money did one of two things that most investment books and advisers tell you NOT to do.
1. They held a lot of cash.
2. Or they took on a lot of risk.
Cash was king
Cash was one of the best investments this year. Despite the fact that cash earns almost nothing in the bank or a money market fund, it still beat out U.S. stocks, commodities and even most bonds.
The S&P 500 and Dow stock indexes had wild swings and ended the year in the red (and that's not Christmas red). Popular bond funds like the Fidelity Total Bond Fund (FTBFX) and the Pimco Income Fund (PONDX) were both down 4% or more.
Investors who ended the year with gains had almost a quarter of the portfolios in cash, Openfolio found. But keeping a lot of cash is not a good way to make money in the long-term. Those who argue they are timing the market tend to miss out on the upswings.


The year of Amazon & Netflix
The other winning strategy was to bet big on individual stocks, especially tech stocks.
"The market is increasingly driven by a handful of high-flying growth stocks such as Amazon (AMZN, Tech30) and Netflix (NFLX, Tech30)," says Coffina.
Amazon and Netflix crushed the competition in 2015. Both stocks gained over 120% for the year, meaning a $10,000 investment on January 1 would be worth about $22,000 now. These are among the 10 most commonly held stocks by Openfolio users.
Many retail investors also hold Disney (DIS) and Facebook (FB, Tech30). Both had applause-worthy returns.
Holding individual stocks adds more risk to an investment portfolio. It's a bet on one company versus investing in an ETF or mutual fund that have a lot of companies.
Consider that Apple (AAPL, Tech30) is by far the most popular stock held by "average Joe" investors, yet it lost money in 2015. In fact, it finished down more than 4%, which is worse than the S&P 500. That made it one of the biggest knocks on people's portfolios this year.
The general rule of thumb is that investors have to do a lot more research if they want to buy individual stocks instead of funds.
Another lesson from 2015? Older investors did a lot better than younger ones, according to Openfolio.

Bloomberg

It's time to tally up the best- and worst-performing investments of the year.
Here they are, in glorious and sometimes excruciating detail.

Currencies

While those going long the Somali Shilling saw nice returns in 2015, anyone who thought the Azerbaijani Manat would rise was very wrong. That currency fell to a 20 year low after the central bank relinquished control of its exchange rate.

World Equity Indices

Jamaican stocks were a pretty good place to invest this year; the island nation's index rose more than 80 percent. As for losers, political woes and lower oil prices have hurt the Ukrainian equities index, which has tumbled 56 percent year-to-date.

Commodities

It was an annus horribilis for the commodities sector, where screens bled red this year. In energy, heating oil was the worst performer, trailed closely by West Texas Intermediate and Brent Crude oil. In the metals category, platinum and palladium were both down roughly 30 percent. To the joy of gold bugs everywhere, the shiny metal suffered the least pain, falling "just" 10 percent. Fittingly, some green could be found in agriculture; while coffee slumped 25 percent, cotton and sugar are in positive territory for 2015.

Bonds

Ukrainian stocks might not have fared well this year, but the country's bonds recovered from their biggest slide ever following the agreement of a debt restructuring deal that was more favorable to bondholders than was initially expected. Unsurprisingly, given political and economic turmoil in the country, the bonds in Brazil took the two bottom spots.

As for corporate bonds, high-yield debt sold by companies with more fragile balance sheets had a tough 2015. In particular, it was not a good year to hold bonds from Arch Coal Inc., which took three of the bottom spots ahead of a potential bankruptcy filing. Some Ukrainian and Russian corporates nabbed the top spots in the junk bond category.

Investment-grade corporate bonds sold by companies with relatively strong balance sheets fared better, notwithstanding some energy-related weakness. Bonds issued by Freeport-McMoRan Inc., which specializes in metals and oil, posted negative returns.

Finally, here's a look at it all tied together: