As the close of the first quarter for 2012 approaches, investors around the country are wondering whether the financial picture on their investments would reflect the shaky notes of 2011. And this, with good reason as proper financial planning has never been as important as it is now in the US. I therefore wanted to take a few minutes for a quick review of the investment climate of 2011, to talk about what I see happening in the markets in 2012 and how I anticipate positioning the portfolios. With an increasing number of retired investors voicing their frustration and discouragement with the low interest rates and highly volatile markets, I however remain optimistic about what lies ahead and confident about the strategies we can use to successfully navigate our way forward.
2011 was a year of incredible volatility. Hedge fund managers are supposed to be some of the best in the business, and yet, I’ve seen reports that roughly 95% of hedge fund managers lost money last year. 95%! Many of the larger stock mutual funds also saw losses. All we need to do in order to understand why, is to look at this one year chart of the S&P 500. It was a year of incredible volatility and, to many, brought back memories of the crash we had in 2008.