Began November presidential campaign in the United States.Arrived to candidates on election day fare equal to win, according to opinion polls at the time. However, on the night of the election, polls quickly turned in favor of Barack Obama, who came out victorious. The next day, the reaction was “Dow Jones” industrial, is the loss of 2% for the first time in a month. Otherwise, it was a month last month is full of events related markets. The benchmark “Dow Jones” industrial at the end of November, down to 13,025.58 points.
Now, it seems that all the attention is focused on ‘fiscal cliff’, and that was looming strongly during 2012.The reasons for financial abyss to a series of tax hikes, and reductions in spending totaling $ 600 billion. It is expected to show the effects of this abyss on the first day of the year 2013, if Congress fails to reach an agreement on fiscal policy.
Falling into the cliff:
This combination led to harsh increase of taxes, budget cuts, and some of the other negative things, threatens to derail the economic recovery, already fragile, in the United States. During about a month from now, it will become clear whether the leadership of the United States can avoid falling into the cliff, as is hoped by the capital markets.
But the failure to take practical steps to avoid falling into the abyss, there will be significant damage to the U.S. economy, and can be paid back to the recession, and leads to a reduction in the gross domestic product (GDP) increased by 4%.
Falling into the abyss, is imminent danger should not be neglected, or minimize it. And optimism markets to avoid this abyss, does not mean that they neglected to such a risk. On the other hand (positive expectation), is working on a kind of grand bargain would put the United States on the path to long-term financial improvement. But success is uncertain.
The most likely final results, is to reach an agreement last short-term, it can be seen that the postponement of the abyss to a later stage, like someone kicking a stone to the bottom of the road, then suffered.
The key point to note, is that even with an interim agreement prevents the occurrence of the economy into the abyss, it is still expected to be fiscal policy in the United States for the year 2013, a major obstacle is likely to lead to increased pressure toward incentives additional parallel (compensatory) on financial aspect; namely recourse to further rounds of quantitative easing.
Distributed and type your investment:
So, what can individual investors to do, to avoid the expected volatility ahead of them in the market? If you publish or distribute your money (investments), on a wide range of companies and investment funds, this would reduce the risk, and gives you the best chance of successful investment in the capital markets. Applied the same philosophy to personal Investment portfolios, through the distribution of your investment on a broad range of assets.
In traditional investment management, there are 4 groups of assets: cash (Cache), stocks, bonds (instruments), real estate. Each of which has a special form of risk, with the advantages and disadvantages of its own.
Money (Cache): If you keep the money in the form of a deposit in a savings account, you can be recovered at any time, and you will get some interest. But revenue expected from this type of investment, very low. But there is a very low risk on the loss of your capital. It is sure to be exposed to capital ratio (may be high) of high inflation, where the money loses its value quickly.
Shares: There is a possibility to get high returns from the growth of the stock markets, but coupled with the potential risks. Increase or decrease the possibility of growth stocks, depending on the risk that REO. The original value of your investment (capital), can be reduced dramatically, in certain cases.
Bonds: bonds has the potential to grow more than just keep money in the bank. The bonds (instruments) companies the possibility of higher returns than government bond yields. This is often due to the high possibility of a risk. The bonds also provide a steady income, can be higher than the return on bank deposits.
Real estate: real estate funds invest primarily in commercial real estate, and those tend to rise in value during periods of prosperity, but in turn loses its value in markets experiencing a recession. However, the relatively long time to buy and sell the property, it can make it a safe haven when equity markets fluctuate. May take the property and take up to 6 months, so you can liquidate (sell) stocks in the real estate investment funds.
Recommends a lot of investment managers now, that take into account the investment in gold, and other precious metals, as a way to distribute your assets in the face of fluctuations coming to the atmosphere of the financial markets. The value of gold and precious metals are not linked, usually, other asset classes, and so that it can cut the risk.
Since when do not see a financial adviser? Now may be the time to relate to one of them. Discussed with him whether your current investment portfolio is able to overcome the uncertainty of economic conditions on the horizon.
Is investing alternatives, or do you invest more traditionally, any real estate and equities? Let your investment experience, through a comment below …
