The View | What you should have bought or sold last year

When I was a young intern at Royal Dutch Shell 30 years ago, I worked in the famous department where scenario planning was invented. I calculated, to two decimal points, the impact on the markets for the major petroleum products for oil price scenarios between US$20 and US$40 a barrel.

Within six months the price of Brent Crude hit US$10! So I am unsurprised that, when the oil price was at US$110 last January, the world’s most seasoned and highly paid oil analysts missed the looming fall to US$57.

However, it was not the black gold that produced the biggest shock wave of the year, but the greenback. The US dollar has had its best year in the past 17; rising against all of its 31 major peers save one – our very own Hong Kong dollar. This means that every time Hong Kong investors invested a dollar overseas in 2014, the currency was always against us. Non-US dollar investors in dollar assets however received a tailwind from the charging buck.

The euro fell around 12 per cent against the US dollar last year, meaning that while the European STOXX index was up 1 per cent locally, a dollar-based investor actually lost 11 per cent. However, a European investor investing in long-dated US bonds happily trousered a 37 per cent return from the biggest US Treasury rally in three years, which took bond yields down 28 per cent, making 2014 yet another good year for bond investors.