I had attended this talk at the Singapore Management University on a particular fund manager’s outlook for 2011, where the speaker gave a great round up of the factors that will have an impact on how markets would perform in this year. Read it here.
Her take is to be overweight equities and underweight bonds despite the unemployment headwinds in the US. Some risks to her views are potential oil shocks, especially if Saudi Arabia gets caught up in the Middle East unrest. While the future can never be read with great certainty, she certainly gave a great round up across the major asset classes such as currencies and commodities, including the metal we all love (love the glimmer, hate the price), gold. Best thing is to consider many views, read widely, and then make up your own mind. It is never a black and white situation so do not expect an easy ride for your investments.
My personal view is that the global markets are already in the throes of recovery. Since financial markets are forward looking, and is a leading indicator, the markets has priced this in, which explains why the major indices have already recovered to levels before the Lehman crisis. Nonetheless, volatility will be present and one should expect a bumpy ride. However, riding it out might end up rewarding as opposed to bailing when dark clouds loom (think Japan’s recent earthquake + tsunami + nuclear crisis). The dark clouds might be opportunities rather than signs of a sustained downturn. But of course major risks remain (for example sovereign debt crisis) and things can change rapidly in the financial markets. Happy investing!
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