I am often asked what we are doing to position our portfolios against the uncertainty in the market, as anxiety continues to run high among investors. One point I like to make in answering this question is that when we lay out the uncertainties we were dealing with in 2011, versus the uncertainties we are dealing with now, I would say there are a lot fewer issues today. Let’s compare some of the major concerns from this year to last.
2012 2011
| U.S. | The “Fiscal Bluff” has created an uncertain tax and budget environment, although some spending constraints may already be in the system in preparation for the potential liabilities and loss of government revenue | Fear of a second recession caused a significant slowdown in recovery
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| Health Care legislation maybe a liability for U.S. corporations | Impending Presidential showdown
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| Europe | Ongoing slow economic environment | Significant fiscal disarray, with many European countries fearful of lending to one another (Greece was on the verge of leaving the Euro) |
| Stabilized debt situation with some ongoing concern | Declining economic conditions
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| China | Stabilizing growth pattern |
Declining economic growth – government lowered growth targets toward 7.5% Continues to be weak; however, the government recently reiterated a target growth rate of 7.5% |
| Threat of a real-estate bubble | ||
| Middle East | Modest threat of violence, with lower incidents in the daily news | Tensions were high as many countries were still coming down from the “Arab Spring” uprisings that occurred throughout the year |
Wow, we’ve come a long way . . .
2133-CLS-12/28/2012