2011 was a rough year for investors. Data for the year to 31 December is now held within our website, within the news section. The monthly report shows some significant double-digit falls over the year. There is a word of caution reading such figures though, the returns shown are only relevant if you invested money at the end of 2010 (for the full 2011 results). Had you done this, over the year investment in the Dow Jones was one of the few rising indices, up 8.4%. Oil and Gold being the only assets to outperform over the same time, both if which have taken more heavy knocks of late. Generally figures for the overall year were considerably worsened in the second half of the year, which is evidenced in the six month figures. This is where the bulk of the poor returns lay for the year and was primarily due to the Euro crisis and the consequential paranoia. However for those that followed my advice in the Spring and Autumn, my views of the markets appear to have been endorsed by reality and losses were not as bad as suffered by most, which doesn’t mean to say that returns were good, but certainly not as bad as they might have been. Whilst I don’t have a crystal ball and clearly take a long-term view of investments, short-term positions can be useful when the world looks decidedly uncertain. I remain cautious, yet optimistic. I hope that this helps clarify why we review portfolios and why clients need to respond to advice to rebalance or make alterations to portfolios. Importantly I review asset allocations throughout the year, but set allocations each Spring and Autumn.
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