What does 2012 hold in store for investors?

At this time of year the financial press and other forms of media roll out ‘experts’ to make predictions about what the coming 12 months hold in store for the financial markets. As usual the vast majority of these predictions will be WRONG!  The predictive ability of economists, analysts, strategists or whatever you want to call them is no better than a fairground gypsy gazing into her crystal ball.  For these so called ‘experts’ to be able to predict the future and how it might affect our investments returns they would have to have perfect advanced knowledge of not only financial but also social, political and technological events and developments to name but a few.  One of the ways to ensure failure as an investor is to be preoccupied with these elements and to try and react to them.  Markets are incredibly quick when it comes to assimilating news that may move prices and do so far quicker than individual investors.  To illustrate how these predictions are usually unhelpful for investors, here is a link to an article for the Daily Telegraph looking at their own share tips for 2011: http://www.telegraph.co.uk/finance/markets/questor/8984906/How-Questors-2011-share-tips-fared.html

Once we learn to stop worrying about short term market movements and take a longer term view focussing on our overall investment strategy we increase our chances of investment success dramatically.  As we discuss in ‘The 7 Secrets of Money’ mastering the way we react to outside events is crucial and often just sticking to your strategy and not reacting is the best course of action.

Whatever this year may bring we wish all of our clients and friends a happy and prosperous 2012.