Investment Update

11 January 2012

It might be a bit of a cliché to describe 2011 as a year of two halves but the first was dominated by so called ‘black swan’ events – the Japanese earthquake and the Arab spring and the second  a preoccupation with the Eurozone crisis. Unfortunately, the latter continues to dominate headlines, the various measures announced by European leaders so far failing to calm investor’s nerves. The latest efforts may have gone some way to appease markets but a new dynamic is also now apparent – just where the UK stands in relation to Europe and the consequences of this whilst seeking a resumption to growth.

Notwithstanding, markets ended last year and started this on a more positive note helped in part by a series of successful bond auctions and better than expected economic data. A number of commentators have been quick to point out that based upon past performance,  with a more positive start to the New Year, this augers well for the year as a whole but then again, why should the first few days of January be any more important as a leading indicator? A poll conducted recently for the FT suggests that the majority of leading economists and strategists are gloomy at best, perhaps not unsurprising given the Eurozone issues. Yet forecasting remains a dark art and as ever, certainty will come with hindsight. What is clear is that crises present opportunities but along the way, the bumpy ride we experienced in 2011 is set to continue.  

Roddy Buchanan