Friday, January 6, 2012

My bold predictions for 2012

The title is misleading, of course, as I have zero ability to see the future. If I can, then I'd buy tomorrow's winning lottery ticket. For investors, you don't base your decisions on predicting the future. You don't buy stocks because of an insider tip that it will go up. Remember Lehman Bros., the first casualty of the 2008 financial crisis, they were given triple AAA credit rating. So I guess the ratings agencies cannot see the future either. No one can predict the future and anyone who claims so is daydreaming, and if you follow that person, you're being stupid. Yes, Europe may trigger a second round of global financial crisis, stocks may lose 50% of its value, real estate prices could go down, oil prices could go through the roof if Iran continues causing trouble. On the other hand, clean energy technology could usher a new wave of investments, Asia would continue its growth and the Philippines could leapfrog into the ranks of the industrialized countries.

As an investor, one should always be cautiously optimistic, expecting the best returns but prepared for economic recessions. Don't waste your energies trying to identify which investments would perform best and putting all your money there. Instead, study each investment available and allocate your funds according to what suits you. Whether it be cash, bonds, stocks, mutual funds, real estate, precious metals, or your own business; it's best to have multiple legs on a chair so if one leg breaks, you don't tumble over. Happy investing!

1 comment:

  1. Its hard to predict the future thats why most who do are wrong.