How the Second Half of 2012 Will Play Out (Hint: Ugly), and Where to Invest
The post 2008 risk-taking environment has been uncertain at best, an environment mirrored in 2012. Government intervention, asset price fluctuation, and sub-par global economic growth have combined to shrink trading volumes and increase volatility across assets. Within a long-term portfolio, tactical decision-making has assumed greater importance. Taken together, these effects have led investors on a search for the Holy Grail of investing: high single digit returns with low volatility.
While there is no halftime in investing, we approach the second half of 2012 and investing conditions look ugly.
Europe remains a mess, emerging markets suffer stagflation, commodity investors question the super cycle, equities soar then swoon, and bond yields shrink in safe havens while rising in ever-wider parts of Europe. US financial assets: the dollar, Treasuries and equities, have remained safe havens leading to significant outperformance. Through May, US equities have outperformed the rest of the world by roughly 800 bps and emerging market equities by 500 bps.Here is how I see the second half playing out.
| More from Minyanville
Five Macro Themes and Three Investment Ideas for 2012
Schadenfreude is a German Word
Think Like Groucho Marx, and Four Other Tips for Avoiding the Next Facebook
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts