As the end of 2011 draws nigh our attention turns to 2012. For some time now the markets have been highly reactive to the "news of the day." That's the "wild card." for investors and advisors. Without it, forecasting might be able to assert some measure of credibility. However, we live in a world of uncertainty, something forecasters understand all too well.
Investors seem to buy on the rumor and sell on the news. One such rumor is that the U.S. economy is going to start growing again. Another is that Europe may soon find a solution to their woes. There is certainly no shortage of banter going round, which brings me to my point.
Will next year bring more of the same?
I'd like to share with you my five hopes for the markets and the economy for 2012.
Hope #1: Lower National Debt
I hope by next Christmas we'll have new leadership. I'd like to see a fresh crop of principle-centered leaders take the helm in Washington. Leader's who will place our nation's best interests above personal gain (sounds like a fiduciary!). Leadership that believes in the entrepreneurial spirit of the citizens of this great nation and fosters an environment whereby this can occur. Strong economic growth would also help shrink the national debt!
Hope #2: Lower Unemployment
I'd like to see unemployment fall to pre-recession levels. Jobs! Jobs! Jobs! With millions out of work, Christmas was rather bleak for many. Even though we focus on the slow retail sector, the real focus should be on those millions who are not able to spend as before. As jobs increase, people will begin to spend and pay taxes, and everyone will benefit.
Hope #3 European Debt Resolution
I'd like to see a prudent solution in place. I realize it's naive to think Europe will be able to somehow escape its dilemma without a scratch. In fact, the countries will probably be admitted to the critical care unit before this ends. You cannot overextend to the extent that Europe did and not expect to experience pain in the resolution. In fact, any viable solution is going to require an extended period of time. So perhaps Hope #3 is good for the next five years.
Hope #4 Emerging Market Growth
If the emerging markets can continue to grow at a robust pace, then that will attract "hot money" and cause inflation. However, if the rest of the world can work out its problems in short order, the money will flow out of the EM's and save them from a more serious bubble-bust scenario. Timing will be everything.
Hope #5 Peace on Earth and Good Will to Men
I hope there are no nuclear attacks, mass riots, natural disasters, or anything else that would cause pain and suffering to mankind, in the physical or economic sense. I suppose you might say I hope for world peace. One can always hope.