Outlook 2012: What the experts predict

Last year probably provided a few sleepless nights for the more timid investors, but 2011 is well behind us now and we can look forward to a cheery 2012, right?

Sadly, no. Many investment professionals predict 2012 will prove to be another trying year, as uncertainty prevails in Europe and China openly talks about the need for stimulus. But there should be bright spots for Canadian investors.

Slow but steady for the loonie in 2012 Despite Canada’s superior economic standing, the loonie dipped against most major currencies in 2011. While it was one of the better performers against the greenback, ending the year at 96.84 cents U.S., the overall forecast for 2012 sees our dollar in a holding pattern throughout the year.

Resources to lag in soft global economy More than any other asset, the demand outlook for commodities is intrinsically tied to the big picture. Forget bottom up investing; if you want to predict the price of, say, copper, you need to examine the entire macroeconomic picture in all of its dismal glory.

U.S. will be a silver lining to bleak 2012 A glimmer of positivity breaks through all the greyness in the U.S. labour market. The nation’s economy is reported to have added a 200,000 jobs going into 2012. A vital sign that the U.S. recovery is taking hold and a sustained economic recovery may be in store.

European recession: The only way around is through The year 2011 was characterized by a string of bad news from the Eurozone. The crisis, now in its third year, has grown worse as policymakers continue to try to contain the floodwaters with pitchforks.

Choose debt over equities As risk aversion continues to haunt equity markets, corporate credit risk looks reasonably good. Despite deleveraging and a prolonged economic decline that threatens to take down some companies, investing in corporate bonds might be a worthwhile alternative to equities.

Related News

Roubini predicts gloomy 2012 Trust Nouriel Roubini to zig when others zag. At a time when many financial pundits are predicting, and certainly hoping for, improved macroeconomic conditions in 2012, along comes the noted economist and paints by far the most cheerless picture of the world economy.

Global recovery to remain polarized The uneven global economic recovery will continue to create a two-speed world where emerging economies will persistently outpace those in the developed world.

Welcome to 2012! The European debt problems of 2011 did show their ugly face yet again and will continue to do so in the weeks and months ahead as European countries get in line for some debt financing.

Raymond James’ stock picks for 2012 Investment dealer Raymond James Ltd. today announced its Canadian Equity Analysts’ Best Picks list for 2012.

ETFs to take off in 2012: BMO Canada’s exchange traded fund (ETF) industry is set for dramatic growth and change in the coming year, according to the Canadian ETF Outlook 2012.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.