So in keeping with the spirit, I’ll make my prediction for the year ahead – most of those predictions by the experts, gurus and professionals will probably be wrong.
These expert predictions mean little at the time, but a year later is when they really become entertaining.
In late 2010 Barclays released their Global Macro Survey of more than two thousand institutional investors.
The pick for the best performing asset class was equities with 40% support, commodities followed with 34%.
Less than 10% of those surveyed expected bonds to be the best performer.
No surprise that (to the beginning of December 2011) diversified fixed income and government bonds were the best performers for the year.
In December 2010 Barron’s Magazine told their readers that smart stock pickers were “looking eastward” in 2011 with the year to be dominated by fast growth in China.
Looking east wasn’t such a good idea, Hong Kong’s Hang Seng index was down nearly 17% to December 2011 with China’s Shanghai Composite down by a similar amount.
A prominent investment bank suggested in The Australian Financial Review that platinum would be the metal of 2011; it also recommended two platinum shares to buy – Platinum Australia and Aquarius Platinum.
By December 2011 the platinum spot price was down 14%, while the share price of those two platinum companies had fallen 83% and 53% respectively.
These results are from major financial institutions with armies of experts, avalanches of data and state of the art forecasting tools.
Not that the financial institutions have learnt it, but forecasting is hard.
Maybe it will be equities this year, maybe fixed interest, maybe cash or maybe real estate,
The only way to capture the outperformer and buffer against the underperformer is to stay diversified across them all.
Peter Mancell is a director of Mancell Financial Group and FYG Planners AFSL / ACL 224543. This information is general in nature and readers should seek professional advice specific to their circumstances. Need help with your financial your financial future, we think we’re Australia’s top financial adviser.
