Alternative Investments the Outlook for 2012
As the New Year is now finally in full swing I thought it would be interesting to outline what I believe will happen in the Alternative Investments market place in 2012.
As most predictions are fairly poor, this will hopefully provide some valuable insight into a market place which will continue to outperform traditional asset classes in 2012.
As with most predictions in the financial press, no thought is turned to what is likely to happen with alternative investments. I thought I would try to reflect upon the predictions of the experts with regard to the financial markets and what impact that would have on alternative investments.
So here comes my outlook for 2012. Remember these are not financial recommendations, and that I am equally unable to look into the future with any incredible powers.
The US Federal Reserve starts to print money again through quantitative easing. The US economy is starting to grow again and you would think that they would not need to print money again. The European Central Bank though finally realises that it will need to print money in order to help maintain the money supply within the Euro area. The reason is that European banks will be cutting the size of their loan books to help them achieve the capital ratios set by the European Central Bank. If the ECB does not start quantitative easing then the euro money supply could reduce and decrease the potential of Growth within the Euro area. What this means for us Alternative Investors is that Gold should still be help in our portfolios, or if you are feeling brave another precious metal such as Silver or Palladium.
The Currency war continues as countries race to devalue their currencies. You may not be aware but with quantitative easing and low interest rates, countries are in a war of devaluing their currencies against other countries to improve the competitiveness of their economies. This they know will help grow their economies and thus help pay down the heavy Government debt which a lot of countries currently have. You may have noticed that the Swiss Franc which has been a safe haven over the last 12 months is now considered too high by the Swiss Central bank and is hurting the Swiss economy. The Swiss central bank has started to take measures to reverse the swiss Francs appreciation relative to other currencies. The US is still accusing the Chinese of artificially maintaining the value of the Yuan against other international currencies. This is a good year to open up a managed forex account and have a professional forex trader make money for you. This investment will make you between 20% and 30% return at this year.
Interest Rates will stay low this year. This will be great news for borrowers, but savers will again get penalised this year. If you want to make double digit returns with little risk, then lending via Peer to Peer lending may be the best way to earn double digit returns this year. I know an borrower who is offering 12% a year for funds and will secure it against property. If you are prepared to take a little more risk with your capital but want instant access to your funds you could make 20% to 30% return with a managed forex account.
Carbon Credits will make strong returns of up to 30% this Year. You may not have noticed but on 1st January 2012, the EU green Zone came into force. That means for all airline journeys within the EU, the airlines must offset their carbon emissions. The US and China are still trying to challenge this decision as they see this as a tax on their airlines. What it means to you as an investor is that the demand for Carbon Credits will rise this year. Make sure you buy them at the right price and don’t overpay, if you would like a recommendation I can provide one.
Oil Prices will continue above $100 a barrel. There is continuing tension in the Middle East, with pro-democracy movements continuing and the wests relations with Iran continuing to decline. This will leave Oil prices above $100 per barrel. As an Alternative Investor, Alternative Investments Info will be showing you how you can invest in Oil at $48 a barrel. Alternatively you could invest in Bio Diesel and investors that have already done this are currently receiving returns of 20% per year on their investments.
Solar Power Investors in UK Domestic Solar Panels Achieve Double Digit Tax Free Returns in 2012. If you had your panels installed by 12th December 2011, you will be making returns of up to 14% in 2012. After that date the Government cut the rates. This has been overturned by the high court and if you can get your panels fitted by 31st March 2012 there is a potential of making 20% return per year. This is based upon the Government not getting the high court decision overturned.
Timber will quietly continue to make double digit returns for its Investors. With the world continuing to wage war on illegal logging and more Governments requiring its industries to only purchase Timber from sustainable sources the supply of Timber will continue to drop as illegal supplies are cut off. The impact of this is to increase the stump values of timber from sustainable sources.
Will the equity Markets Have a Bull Run this Year? As an Alternative Investors I personally don’t have much faith in equities and believe better returns can be made with less volatility. With Quantitative easing potentially starting again in Europe and the US, evidence tends to support the theory that this money printing supports the equity markets as this hot money is looking for a home. Companies are starting to store cash on their balance sheets and may start share buyback schemes as they may have few other ideas as to what to do with their cash.
Bond Markets Will Continue to be in the News. The financial press will continue to focus of the bonds markets this year as the European Debt crisis continues. Many professional fund managers have increased their holdings in bonds from equities because of the higher yields to be made. There is a potential risk to the bond markets as predicted by RBS that corporate bond defaults could rise this year from 2.6% to 5%. This should drive corporate bond yields higher as investors require an additional premium for default risk
The Pension Crisis Will Start to be Reported in Greater Detail in the Financial Press. Currently the European Debt crisis is the only story in town. Once this Sovereign Debt crisis has been managed by Europe, the next major crisis which the western democracies will have to deal with is the pension crisis. Most Governments and Employers are struggling to meet their pension commitments, and at some point in the near future there will need to be a serious debate about what is and what isn’t affordable. This discussion has started but has been filed away in the too difficult area, especially if a Government is facing an election this year.
I hope this article has provided you with an alternative viewpoint from what traditional financial commentators write. If you would like any further information or have any comments please visit my website www.alternativeinvestmentsinfo.com.
Want to know more about Alternative Investments? checkout Mark Skeels’ excellent free report on Alternative Investments. Sign Up now for your free Alternative Investments Report.
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