2012 Year in Review
Economy & Markets: Overview
Throughout 2012, investors did not have to look hard for reasons to avoid the financial markets. Economic news provided abundant cause for anxiety, prompting some investors to consider fleeing to cash. Some investors responded to the headlines and acted on their fears. Unfortunately, on the sidelines they missed the opportunity to capture the strong returns across the markets in 2012.
The year opened with lingering concern about the weak US recovery and debt crisis. Many pundits predicted another lacklustre year for stocks and more volatility. Some predicted a euro zone breakup. The global economy was showing signs of a slowdown, while the US elections and spectre of the “fiscal cliff” prompted caution.
Despite the steady stream of bad news, major market indices around the world delivered double-digit total returns, with Australia outperforming most other developed markets. And while the media constantly talked about volatility driving investors away, market wide volatility actually fell to its lowest level in six years.