Are we out of the woods yet?

by Tim Whiteley

The short answer is no. There is still de-leveraging going on in many of the world’s major economies, with some ongoing uncertainty, which is the mortal enemy of the markets.
Macro issues like North Korea threatening nuclear attacks don’t help either. Other imponderables, like a new strain of bird flu in China, have sector-depressing effects as well; regional airlines and soya bean stock have already been hit.
Notwithstanding the unexpected and unpredictable, ultimately the so-called developed world will get back on track, but expect sluggish, low growth for some little time yet from the US and particularly Europe. Rather than calling it a ‘Depression’, the ‘speak’, in money circles, is ‘The Great Recession’. Nonetheless, it’s not all doom and gloom; the facts indicate that lessons have been learned and changes have and are being made. Whilst the euro zone moves slowly and its decision-making process is cumbersome, to say the least, there are signs that the economically more ’troublesome’ southern European countries are turning their situations around with varying levels of progress and success. The fact is that Europe remains the largest trading block on the planet and, although part of its finances might be bent–if not broken, the union will haul itself out of the mire, hopefully, leaner and fitter. You only have to look at how the world reacts to economic shocks in Europe to understand how important it is–largely with panic due to the realisation that Europe in the doldrums affects the whole world financially.
So, where do we look for decent, stable returns on money? Still, the markets are far too unpredictable for the feint hearted. As is my want, I was locked into my Bloomberg and CNBC screens, alternating between the two. Almost simultaneously, two highly respected economists, one on each of the feeds, came out with completely different and opposing views of how the worlds’ stock markets would go in 2013. One said it would be a ‘bull’ year and the other said, the ‘sale in May’ philosophy will come early this year as investors take flight, with fears that the recent rises have gone too far. With this kind of ‘expert’ disagreement, how can anyone hang their hat on such uncertainty?
Most of us are the same; we’re looking for something better than the banks will give us, without collapsing with shock into our toast and marmalade, watching the value of our hard earned cash jump hysterically up and down.
There are some possibilities that have come more to the fore in recent years. In an endeavor to offer investors a secure, consistently-reasonable return, funds have developed in sectors where demand for their services far outstrips supply. There are several examples of this, in several sectors where, although difficult to believe, prices have never dropped since early on, or before the financial crisis or, indeed, since their inception. With something over 40,000 funds available, it is like looking for the proverbial needle in a haystack. Nonetheless, they do exist.

Important Note – This article contains general information only and is not intended to be taken as specific financial, investment, or tax advice. A personal analysis should always be obtained.

Tim Whiteley of IFA International has over 25 years as an IFA, advising international investors and expatriates, both onshore UK, and offshore in Asia. With offices in Bangkok, and regular client visits to Pattaya, IFA specialises in wealth protection services, offshore trusts, QROPS UK pension transfers and QNUPS, creating tailor made investment solutions for individuals around the world.

IFA International does NOT provide discretionary portfolio management, securities advice, forex trading, or local brokerage/insurance products. The services that IFA International Group provides are for international investors and expatriates only and are not applicable to local nationals. This is NOT a solicitation to sell or market securities. Questions to the author can be directed to: timwhiteley@ifainternationalgroup.com

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