As difficult as this year has been for ASX shares, other assets have suffered greatly too.
Whether you possess cryptocurrency, real estate, or even bonds, the chances are you've suffered losses in 2022.
Even for long-term investors, this is undoubtedly distressing.
But there is a bright side to the bear market, according to one expert.
Potential returns have actually risen in 2022
Applying some conservative assumptions, the team at AMP Ltd (ASX: AMP) projected what returns would be like for ASX shares and other assets over the next five to 10 years.
And the findings were surprising.
Using this model, the return potential dipped below 5% in late 2020. But this year, in troubled times, that has risen to 7% per annum.
"This is partly due to a 1% higher medium-term inflation assumption, but the rest is due to the rise in interest rates, bond yields and yields on assets including shares over the last year," said AMP chief economist Dr Shane Oliver in a blog post.
"This is the silver lining to the cloud — or rather storm — that has hit investment markets."
This goes to show how a dip in ASX shares presents excellent buying opportunities.
"Bear markets are painful and are hard to predict, but they do push up the medium-term return potential of shares and so provide opportunities for investors."
It seems a minority of Australian investors are taking advantage of the current downturn.
According to research from comparison site Finder, 7% of Australians are investing "more adventurously" than they were six months ago.
According to Finder stock expert Kylie Purcell, for many younger investors, this could be their first experience of a bear market.
"Investing in shares during a market downturn can be daunting, especially for people with more aggressive portfolios or who have high-growth super funds," she said.
"[But] Warren Buffet said that it is wise for investors to be 'fearful when others are greedy, and greedy when others are fearful'."
ASX shares are winners
Oliver surmised that ASX shares, due to their high dividend yields, stacked up well for the coming few years. Asian stocks were his pick for capital growth potential.
Return from bonds would remain poor and real estate would remain depressed due to rising interest rates.
He did have a caveat for his return projections.
"The main downside risk to our medium-term projections is that inflation trends even higher driving a further trend rise in interest rates, bond yields and yields on other assets (including property & infrastructure), resulting in an ongoing drag on capital growth."
Oliver implored investors to "have reasonable return expectations" for the coming period.
"Interest rates and investment yields are still historically low so [it's] unreasonable to expect sustained double-digit returns."
Investors should concentrate on acquiring investments with a certain characteristic, he added.
"Focus on assets with decent sustainable income flow as they provide confidence regarding future returns."
