2012 is already shaping up to be an interesting year. There are many things lurking that will affect your wealth. Before I go into what we might expect, lets have a brief recap of 2011:

-ASX ended down about 15% for the year. Not a great year considering No One in the mainstream media/investment community even predicted a negative return.

-Gold once again was the best performing asset class with a return of 10% and is now in its 11^th year of a bull market.

-The debt crisis in Europe accelerated prompting ‘stealth’ QE in December from the US Federal Reserve via swap lines in place between the ECB and Federal Reserve. This will eventually show up as higher prices for food and energy (among other things).

-Australian House prices continued to slide posting falls in all capital cities. Are there more falls to come?

-Interest rates dropped for the first time in about 18months as the Reserve Bank felt inflationary pressures were easing. Will this continue?

There were of course many more events but the above are some of the major ones from 2011 as they relate to the financial sphere. 

I’ve been spending the better part of the last week reviewing the predictions for 2012 from many newsletters and other services I receive. Most of what I read is related to financial markets and whilst it’s tempting to make specific predictions I’d prefer to take a more global approach and long term view. Here are some global macro themes that will drive investment opportunities for you and I not just this year but for the next 5yrs:

1)      The debt crisis is not being adequately dealt with. Most of the so called solutions that have been proposed and implemented have involved issuing MORE debt to solve the debt problem. How do you solve a debt crisis with more debt?

2)      The global population is rising. There are estimated to be 6.8 BILLION people on the planet. That’s a lot of people who need food and energy. It’s going to put tremendous pressure on resources and Food & Energy costs WILL rise over time.

3)      The global political climate is uncertain. Pollies the world over are trying to save the world or in our case, tax it to death. What they should be doing is letting markets work themselves out. This will continue to cause uncertainty with the business and investment community around the world as you never know what they’ll do next.

So what might this tell us of things to come in 2012 and beyond? Here are some things to keep your eye on for the coming year:

1)      More trouble in Europe will have flow on effects to China the US and yes, Australia.

2)      Stock markets will continue the wild ride of euphoria followed by despair, in other words they will be volatile.

3)      Government intervention in markets will continue unabated. This is not a good thing.

4)      Geopolitical events in the Middle East may boil over which could mean much higher fuel prices.

5)      Gold and Silver will likely continue their march towards re-introduction as currency.

6)      Inflation will rise as more and more money is created by central banks.

The question to ask yourself is: Are you, your family and your investments prepared for any of the above issues?

If you aren’t sure then please contact me to have a review. The best time to get prepared is BEFORE a crisis (or opportunity) hits. From crisis comes opportunity!

Wishing you all the best for 2012 and beyond!