Happy New Year and welcome to 2013, I’m not sure we were going to make there for a while, I know that in the lead up to New Year’s I was terrified that I was going to fall off a cliff. Miraculously though, right at the last minute the cliff turned out to be nothing more than a small ditch although, after momentarily dipping into it and then emerging on the other side, I was quickly told that a much bigger cliff awaits me a few months down the road.
And so 2013 begins the same way as 2012, with lots of headlines of impending doom, or boom, and if you look back each year begins the same way. A recent Bloomberg article however noted that few of the predictions from last year actually occurred. Be it the collapse of Europe, a fall in the U.S. stock market, the continuation, cessation then recommencement of the China boom in Australia, the bankrupting of Greece, Portugal and Spain, the bond market did not implode and the re-election of President Barack Obama did not derail the US market.……the list goes on.
Instead, it turned out that owning a share of the world’s businesses was a sensible idea, despite suggestions from some observers that the “cult of equity” is dead. For the year, total return was 16.42% for the MSCI World Index in U.S dollars, and 16.00% for the S&P 500 Index. Among forty-five global stock markets tracked by MSCI, only three posted negative results in local currency (Chile, Israel, and Morocco), and twelve markets had total returns in excess of 25%, with Turkey leading the pack at 55.8%.
Although much of the financial news over the past year highlighted Europe’s fragile financial health, most of the region’s equity markets outperformed the US, including Austria, Belgium, Denmark, France, Germany, the Netherlands, Sweden, and Switzerland.
As we move into 2013 and as you start to make your way back to the office from our summer holidays you will be tempted to take the advice of the screaming masses. Of course these people will get something’s right, after all if you keep making predictions one will eventually be right. Instead focus on what is important to you (do you know what that is?), the things that you can control (very little!) and take a long term approach to where you are going (do you have a plan?).
(If you can’t answer the questions above send me an email and maybe I can help you with New Years Resolution)