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Both stocks and bonds took a beating, with the MSCI World index posting its worst month in almost ten years and spreads on US high-yield bonds shooting up by 104 basis points.

The Nordics fared better, in equities as well as fixed income, though we'd be hard-pressed to find grounds for rejoicing.

Notable exceptions to the market malaise were government bonds in countries like the USA and Germany, clearly a flight to safety, and Italian government bonds – a relief rebound following budget adjustments.

A lousy month indeed.

For the record: In local currency terms, December was the 19th worst month out of all 588 months since inception of the World index.

Scared? You shouldn't be. Chew the numbers differently and you will notice that such a lousy return can be expected every 30 months or so. That's the name of game, really. Stock markets do slide from time to time, just as occasional spread hikes are a fact of life in bond markets. If nobody told you, let me be clear: There'll be months like this.

Chew the numbers differently and you will notice that such a lousy return can be expected every 30 months or so.

Now, such months certainly make life more difficult for our sales staff and investment advisers. It's notoriously difficult to buy the dips and sell the rallies, not to mention argue convincingly against the common mood.

For our portfolio managers, however, things just got a bit easier. Whereas they spent part of last year scratching their heads in search of securities worth buying, they now enjoy a distinctly expanded menu. For fixed income in particular, higher yields make it notably easier to deliver appealing returns going forward.

So ... three cheers, then?

Nah. We do prefer positive returns in all our mandates, each and every month if possible, and certainly every year. December could have been a lot better.

But please remember: There'll be months like this.

Oh, and by the way: Have a wonderful and prosperous new year!

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