10 Global Investment Predictions For Advisors, Investors<br><br>
And there will even more developments for advisors and investors to watch later this year considering that a dozen countries including the U.S. accounting for more than half the worlds GDP by purchase power parity will be holding elections that are sure to impact all facets of the world economy.
Between Chinas ever-changing and increasingly critical economic outlook, the proposed tax-reform measures outlined in President Obamas fiscal 2013 budget and the impending IPO of the Century from Facebook, advisors and their clients will have to pay excruciatingly close attention to all these macroeconomic and geopolitical developments to generate solid returns through the rest of 2012.
Source: Neuberger Bermans investment strategy group.
1. Prominent Politics: Impactful in Europe, But Mostly Noise Stateside<br><br>
and tax reform) will be on hold until after Nov. 6.
In comparison, politics and intra-governmental pacts in Europe should help temper the sovereign debt crisis and influence investment returns in both the fixed-income and equity markets.
2. Obama Wins Second Term<br><br>
However, the GOP will have a difficult time unifying behind a candidate while President Obama will be able to point to enough successes (e.g., nine straight quarters of economic growth, 22 consecutive months of private sector job gains, the death of Osama bin Laden, Libya) to win re-election.
3. U.S. Economy Avoids Recession<br><br>
However, we anticipate a steadier year of growth as opposed to the sporadic GDP prints witnessed in 2010 (1Q: +0.4%, 2Q: +1.3%, 3Q: +1.8%), thanks in part to continued improvement in the labor and housing sectors.
4. European Sovereign Debt Crisis Reaches Tipping Point<br><br>
5. China Experiences a Soft Landing<br><br>
6. Broadening Global Monetary Easing Cycle<br><br>
developed and developing economies alike, which should aid global growth and support commodities and emerging market equities and debt in the year ahead.
7. Favor High-Quality Equities<br><br>
8. Income-Oriented Assets to Offer Attractive Return Profile<br><br>
9. Geopolitical Tensions to Remain Elevated<br><br>
10. Sector Rotation Continues to be Pivotal<br><br>
a trading-range, macro-driven market and think the energy, information technology, consumer staples and health care sectors offer a good hedge to the aforementioned risks. Their exposure to faster-growing markets and strong underlying demographics should help these sectors offer an attractive return profile for the year ahead.