Mintos Insight February: 2023 forecast and 2022 reflections on the state of the investment market

In this month’s Mintos Insight, we take a look at how major asset classes performed in 2022, and how this has impacted growth in January 2023. We analyze the trends that are expected for the rest of the year.

2022 trends: Record-breaking poor performance

For multiple asset classes, it was a year of record lows. Sanctions against Russia (due to the war in Ukraine) and retaliatory measures by Russia had a large impact on financial services in 2022. When the war began in February 2022, there were concerns about its implications.

A perfect storm comprising contractionary monetary policy, surging energy prices, and the lingering after-effects of the COVID-19 pandemic echoed throughout the markets, leading to an overall weaker performance in 2022 than expected.

However, it wasn’t all doom and gloom for the alternative investment market in 2022. Our CEO and Co-Founder Martins Sulte shares, “2022 was a year of uncertainty brought about by unprecedented global economic events. Despite these challenges, Mintos has continued to grow, while interest rates in EUR have increased from 9% to 14%.

While it is impossible to predict what the future will bring in 2023, existing data at Mintos has been promising so far. We are hopeful that while growth may lean towards the conservative side, 2023 will be a year of stability and continuous advancement for our investors.”

Traditional asset classes

Stocks (equities)

By mid-2022, it was clear the stock market had entered a bear market (an extended drop in prices, usually over 20%). Closing out the year, the S&P 500 saw its worst year in over a decade with a return of  -19.44% (-38.49% in 2008, for comparison).1

Many traders believe that the S&P 500s’ performance in January is a strong baseline for the rest of the year. According to the January Barometer, “As goes January, so goes the year.”2 Using this as a gauge, the S&P 500 ended January up almost 6.2%.3 While the January Barometer is not a total guarantee that the S&P 500 will show strong returns for the rest of the year, the overall trend shows that the likelihood is high.4

Similarly, the European stock market also underperformed, though not as aggressively as the United States indices. The STOXX Europe 600 was down 10.4% at the end of 2022, in contrast to +25.1% in 2021. While YTD returns are up at +7.01%, it is hard to determine if this is indicative of the future.5

Kicking February into high gear, the United States Federal Reserve (The Fed) just announced that it will be increasing benchmark interest rates once more by a quarter of a percentage point (0.25%).6 The European Central Bank (ECB) is also anticipated to trigger a half percentage point increase (0.5%) in the coming days.7 The hikes will allow the stock market to recover, with only smaller interest rate hikes planned, followed by a pause for the remainder of the year.8

Following the latest hike, the S&P 500 closed higher following The Fed’s press conference, gaining 1.05%.9 Investors seem to be unfazed and optimistic, despite the announcement that there will be no rate cuts for the rest of 2023.

Jerome Powell, Chair of the Federal Reserve of the United States also confirmed that “the disinflationary process has started. We can see that and we see it really in goods prices so far,”10 which gives assurance that contractionary monetary policy will not be as aggressive for the rest of the year, adding to investor confidence.


Traditionally, bonds are a good hedge against recession (which may be triggered by inflation) due to the inverse correlation between bonds and interest rates. Typically, as interest rates rise, the value of existing bonds decrease, as new bonds with higher interest rates become more attractive to investors.

In 2022, interest rates were raised significantly to the highest levels seen in 15 years by The Fed in order to reduce upward pressure on prices (the cause of inflation).11 At its worst in 2022, The U.S. Aggregate Bond Index was down 13.06%.12

The ECB was not far behind The Fed–by December 2022, the three key interest rates were increased by a total of 0.75%.13 Beyond interest rate hikes, the ECB also confirmed that it would implement quantitative tightening by offloading 5 trillion EUR worth of bond holdings.14 This offloading will likely cause investors to bet against bonds, as investors anticipate a fall in bond prices (yields perform inversely to prices).

Investors typically bet against German bonds, since it is commonly used as a hedge. When we last looked at the 10 Year Government Bond yield in Germany, the yield was continuously rising. By the end of 2022, it was almost at 2.6% with a slight dip to 2.2% by the end of January 2023.15

Other European bond yields followed a similar trajectory– the France 10 Year Government Bond is currently at 2.7%, dropping from almost 3% in December.16 Similarly, Italy’s 10 Year Government Bond was down about 0.6% from December to the end of January 2023.17 With The Fed and ECB’s position to stabilize interest rates in 2023, we can expect the outcome to drive up bond prices, and push down yields, as inflation comes under control.

Real Estate

REITs were also one of the worst-performing asset classes of 2022, with rising interest rates and low demand. REITs remained volatile for most of 2022, but showed slight signs of recovery towards the end. Ultimately, however, the majority of REITs ended the year in red.  A drop in total returns in December pulled the FTSE EPRA Nareit Europe down by over 25% in 2022.18

The forecast for 2023 is slightly brighter. For now, the FTSE EPRA Nareit Europe is up 8.77%.19 Now that the ECB’s moving to stabilize inflation, it looks like a recession may be avoided in 2023.20 As interest rates stop climbing and inflation is curbed, this creates circumstances where REITs are poised to do better for the rest of 2023.


From 2020-2021, cryptocurrencies (crypto) exceeded all expectations. This can be credited to increased institutional adoption by hedge funds, investment banks, and even two countries adopting it as legal currency.21 This mainstream acceptance led to a much higher demand for this asset. The COVID-19 pandemic also quickly proved that crypto is a strong hedge against inflation and a potential safe haven asset, similar to gold. Bitcoin hit new highs multiple times, reaching over $65 000 in November 2021, further reiterating its stellar showing.22

Crypto’s positive growth was not sustained for long. Like most other asset classes in 2022, the tank can be attributed to The Fed raising interest rates to a high of 4.5%.23 This, coupled with other negative factors, like the collapse of FTX (one of the world’s largest crypto exchanges at the time), led to a major crash. When FTX, declared bankruptcy in November 2022, Bitcoin prices plummeted, closing out the year at over $16 000.24 Overall, Bitcoin dropped almost 65% in the last year.

Despite previously being a strong hedge against inflation, the future of this asset class is very much dependent on how inflation continues to play out in 2023. While it’s hard to predict, it is possible that further unpredicted contractionary monetary policy by The Fed may further impact crypto growth negatively in 2023.25

 Loan investments on Mintos

Loan investments tend to have a low correlation with the markets: as they are not publicly traded, they are often less influenced by the same market drivers, providing a buffer against market downturns. The average net return on Mintos for the year 2022 was 7.8%, signaling a year of growth. The average interest rate hovered at 14%, up from 9%.

While growth has been positive, it should be noted that the war in Ukraine significantly impacted loan repayments by Russian companies in 2022. But payment flows have surely been reestablished, despite limitations imposed by the Central Bank of Russia. As of publication date (6 February 2023), €9.1 million has been repaid.

Mintos Activity: January 2023

In January, there was almost €20m worth of investments per week. The average interest rate for January stands at 12%, at a slight dip from December. This can largely be attributed to a seasonality effect – lending companies do not need access to new financing as aggressively in January as they did in December.

Another reason is an increase in demand from investors, since rates fluctuate with supply and demand. As more people invest, the interest rate is more likely to fluctuate.

“The positive trend of increased investments continued into January, with monthly investments surpassing the €71m mark. The average interest rate for EUR investments slightly decreased to 13.4% at the end of the month (vs 13.6% in December).” — Peteris Mikelsons, Head of Partnerships at Mintos.

If you’d like to read any previous Mintos Insight publications, you can find them in our Mintos Insight library. Or, if you would like to learn more about investing, we recommend exploring the Mintos Investor Academy.

Refer a friend to Mintos, and you can both earn

We’re back with our refer-a-friend program! For a limited time only, invite your friends to join Mintos. When they invest €1000 or more before 28 February 2023, you both earn a €50 bonus. Your friend will also receive a 1% bonus on the average investment in the first 90 days.


This is a marketing communication and in no way should be viewed as investment research, advice, or recommendation to invest. There is no guarantee to get back the invested amount. Past performance of financial instruments does not guarantee future returns. Investing in financial instruments involves risk; before investing, consider your knowledge, experience, financial situation, and investment objectives.


  1. Silverblatt, H., U.S. Equities Market Attributes December 2022, S&P Dow Jones Indices (Accessed February 2023)
  2. Hirsch J. (2007), Stock Trader’s Almanac 2008
  3. S&P Dow Jones Indices (Accessed February 2023)
  4. Dorfman J., Market Is Following A Classic January Playbook So Far, Forbes (Accessed February 2023)
  5. iShares STOXX Europe 600 UCITS ETF (DE) (Accessed February 2023)
  6. Federal Reserve issues FOMC statement, Board of Governors of the Federal Reserve System (Accessed February 2023)
  7. Evans C., Fernandez C., ECB to raise rates again and face questions about future path (Accessed February 2023)
  8. Fed Chair Powell: Disinflationary process has started for the first time, CNBC Television (Accessed February 2023)
  9. S&P Dow Jones Indices (Accessed February 2023)
  10. Fed Chair Powell: Disinflationary process has started for the first time, CNBC Television (Accessed February 2023)
  11. Decisions Regarding Monetary Policy Implementation, Board of Governors of the Federal Reserve System (Accessed February 2023)
  12. iShares Core U.S. Aggregate Bond ETF (Accessed February 2023)
  13. Monetary policy decisions, European Central Bank (Accessed February 2023)
  14. ECB to start offloading bond holdings in March, Reuters (Accessed February 2023)
  15. Germany 10 Year Government Bond, Wall Street Journal (Accessed February 2023)
  16. France 10 Year Government Bond, Wall Street Journal (Accessed February 2023)
  17. Italy 10 Year Government Bond, Wall Street Journal (Accessed February 2023)
  18. FTSE EPRA Nareit Global Real Estate Index Series, FTSE Russell (Accessed February 2023)
  19. FTSE EPRA Nareit Global Real Estate Index Series, FTSE Russell (Accessed February 2023)
  20. Chakravarty S., Chakrabarty S, Goldman Sachs no longer expects recession in euro zone in 2023 (Accessed February 2023)
  21. Bitcoin becomes official currency in Central African Republic, BBC (Accessed February 2023)
  22. Bitcoin USD (BTC-USD) Price History & Historical Data, Yahoo Finance (Accessed February 2023)
  23. Decisions Regarding Monetary Policy Implementation, Board of Governors of the Federal Reserve System (Accessed February 2023)
  24. Bitcoin USD (BTC-USD) Price History & Historical Data, Yahoo Finance (Accessed February 2023)
  25. Royal, J. How Fed rate hikes impact stocks, crypto and other investments (Accessed February 2023)


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