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The Best And Worst Investments Of 2013

The Motley FoolCan you guess what the best performing market of 2013 was? Here’s a little clue. Don’t cry for me…..

It is indeed Argentina. And investors in Latin America’s third-largest economy are almost certainly not shedding any tears.

The resources-rich country has delivered the best stock market return of 2013. The benchmark Merval Index was up a whopping 89% last year. The gains, it has to be said, came in the latter part of the year as optimism over reforms prompted investors to pile into shares.

United Arab Emirates also punched well above its weight last year. The UAE General Index rose 63% thanks to renewed investor confidence. The market regulator has implemented stricter rules regarding transparency, which has attracted foreign money into the region. The flood of money elevated the UAEGI to the second-best performing market of 2013.

The third best-performing market of 2103 was, unsurprisingly, Japan. The reforms instigated by Prime Minister Shinzo Abe have helped drive economic growth, exports and consumer spending. But perhaps more importantly, the strategy has brought an end to years of deflation. The Nikkei 225 was up 57% last year.

Other markets that performed well included those of Nigeria, America, Ireland and Greece.

But the markets that didn’t do well last year include Thailand, China and Turkey.

Civil and political unrest in Thailand did much to unsettle investor confidence. The SET index fell 7%. Elsewhere, political shenanigans in Turkey sent the Istanbul 100 Index down 13%.

Meanwhile, China, which was once the darling of emerging-market investors, also performed badly. The Shanghai Stock Exchange lost 7% last year. As an emerging market, investors are understandably sensitive to the moves of policymakers. And a lack of coherency and transparency of China’s proposed market-led reforms has left investors a little bewildered and befuddled.

The Singapore market has been uninspiring – the Straits Times Index (SGX: ^STI) has done nothing this year. Its lacklustre performance has largely been due to a raft of underperforming property developers, poorly performing commodity companies and businesses exposed to embattled Asian Pacific countries.

However, it is important to bear in mind that over the last ten years, the Singapore market has appreciated 6% a year before dividends are included. When dividends are factored in, the total return over the last decade has been around 9%, which is quite respectable.

So rather than focus on one year’s underperformance, we should remember that stock market investing is a marathon, not a sprint. And that the long-term outlook for the Singapore market remains bright.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn't own shares in any companies mentioned.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.