2012 Market Outlook

I hate to do it, but first I’m going to address the hype around 2012 being the end of the world, according to the Mayans (who disappeared hundreds of years ago, so clearly they were off a bit on their own account). Yes, their Long Calendar of 144,000 days (~394.5 years) showed an ending just a few months from now. However, it will only be the ending of one cycle, the 13th such cycle in their system, which began in 3114 BC. As far as I can tell, the world didn’t end 395 years ago, in 1617. The only slightly relevant thing I could find that happened that year was that Pocahontas died. Now, on to the real stuff!

Mayan CalendarThe year has started off somewhat positive in the US, with the unemployment rate moving down to 8.5%. A year ago, many economists had foreseen unemployment moving to 16% or higher, so things are far from being as dire as economists recently expected. As an optimist, I don’t get bogged down by the doom-and-gloomers who point out, correctly, that the unemployment rate does not include those who have stopped looking due to a lack of jobs, which could eventually create a lower-class of jobless. I agree that we are in a bubble right now that is impacting many negatively, but I have faith in innovation, American and foreign, and I believe there will be an industry in the next decade that we can’t even fathom today.

Ten years ago, it would have been difficult to describe/believe that today there would be:

  • A huge population who spends money on apps on their iPhone/iPad/iPod
  • Internet retailers like eBay and Amazon which has changed the way many people shop
  • Facebook – imagine describing that in the 1990’s
  • A fully-mapped human genome which is having a dramatic impact on new and better pharmaceuticals
  • Several companies that have created privately-owned space shuttles which will be used for things that NASA will no longer be able to do due to budget cuts
  • A dramatic shift in our electronics to LCD/plasma TVs, LED lights, digital cameras, and flash memory
  • The discovery of hundreds of years’ worth of natural gas resources under our soil – not an innovation itself, but a great resource which leads to exports and further innovations.

All of these innovations and others yet to come will create jobs that aren’t yet available or imaginable.

The bottom line is that investing hasn’t changed. There has throughout history always been a good reason NOT to invest. But there are yet still more reasons TO invest. And, once you do invest, diversification and rebalancing are both key to maintaining and growing those investments. It’s my job to help with this, and I’d be more than happy to discuss investing, planning, budgeting, or any other topic that may be concerning you in the new year!

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