Where to invest in 2012
Nobody is really sure with the shaky economy in Europe however savvy investors will be taking a certain tack, we see a few sectors doing better than others.
The economy is growing however weak and unstable we know it to be. US Congress seems to be stifling the world with it’s complacent attitude and willingness to do nothing at this time. So 2012 will not be a year of fantastic gains by any stretch of the imagination
It does however appear that we are finally climbing albeit weighed down with mud from the proverbial quagmire that is the recession. We wait to see if there is a double dip. Diversification and simple strategy seems the way forward if the best fiscal minds are to be believed.
The classic approach of exposure to varied asset classes (cash , bonds and stocks) are being adopted by the gurus. The mutual funds within the asset classes can reduce market risk. We also advise adding a little to each fund sector through EFT’s and Index funds which you trust the manager of and know he is a diligent fellow.
Certain defensive fund sectors do well in a downturn.
In UK for example sales of biscuits have soared seems Britons need the quick rush of sugar and beverages during cold gloomy winters especially in a depression. People are spending less and staying in more so household comforts remain a safe bet.
Utilities generally do well during bust times as people need to eat and keep their homes warm during their time indoors.
Health sectors, People on both sides of the Atlantic ageing fast as we start to see the bulk of the Baby boomers coming to retirement age, so medicines, pharmaceuticals and Medical equipment companies are safe bets.
Some Investors the ones who have a pre-disposed love of the gamble will go for Real Estate and technology this is a reasonable risk we feel people still like to own homes and companies like to own property ask Ray Krock whether he will go out renting!
How much is a safe bet? Well safety is the total portion of exposure to sector funds should be around 15% of your portfolio. stop watching Bloomberg for the timings and go for a safer long term and ride out the storm, patience is a virtue!