Outlook for 2012: Protecting your wealth

BESTINVEST
ADRIAN LOWOCK

2012 Macro outlook

Weak economic growth will continue in the West, as the deleveraging process enters its third year – we are still several years away from completing this. However, any resolution in the Eurozone is likely to provide some short-term support to stockmarkets.

Predictions for end of 2012

FTSE 100: 5,700

● S&P 500: 1,350

● UK average property price: 5% decrease

● UK interest rates: 0.5%

● Gold: $1,600

How to protect your wealth

Volatility will remain in 2012, so investors should avoid trying to predict markets and instead focus on long-term themes which will deliver. Income generation will remain a key investment strategy as you get paid to wait. Equity income growth in Asia would suit more adventurous investors, while global income funds will help diversify equity income exposure. The US could be the market to surprise on the upside.

GLENDEVON KING
PETER BAUM

2012 Macro outlook

2012 has the hallmarks of being a year of consolidation at best or flat to slightly negative growth more likely. Irrespective of any stimulus boosting measures, it will take months, perhaps two years before confidence returns to drive economic growth.

Predictions for end of 2012

● FTSE 100: 5,100

● S&P 500: 1,280

● UK average property price: 7% decrease

● UK interest rates: 0.5%

● Gold: $1,550

How to protect your wealth

The dollar should retain its status – while the Norwegian krone, Australian dollar and Swiss franc should also strengthen during 2012. For cautious investors, short-dated, fixed income bonds in any of these currencies would be my preferred investment strategy. For more aggressive investors there is a sweet spot in heavily discounted, perpetual floating rate notes in US dollars issued by the Canadian and Australian banks.

T1PS
TOM WINNIFRITH

2012 Macro outlook

Germany will cave in and across the world central banks will print money. The true power of America will mean that it will lead the charge of quantitative easing. The net result will be that fears of recession are replaced with accelerating inflation.

Predictions for end of 2012

● FTSE 100: 5,900

● S&P 500: 1,350

● UK average property price: 9% increase

● UK interest rates: 0.5%

● Gold: $2,300

How to protect your wealth

Investors should flee fiat currencies and invest in hard assets. The best investment of all will prove to be gold, as it is the only currency not set to be debauched by politicians and bankers during the year. The best way to play gold is by amassing a balanced portfolio of mid-cap gold producers, which I think are right now as cheap as chips.