Investors who were given a manicure set for Christmas this year will be hoping it came with a gift receipt. They are unlikely to be using it any day soon, given that they will have been biting their nails for much of the year.
It’s a far cry from a year ago when the mood was altogether different.
As 2010 came to a close the FTSE100 had reached a 30-month high and many stock market experts were looking forward to shares marching on, with Britain’s blue-chip index expected to hit 7,000 by the end of 2011.
These optimists had not counted on the eurozone crisis, which saw investors take flight and share prices around the world nose-dive in the summer. The question on investors’ lips is whether there will be money-making opportunities in 2012?
Well, you will have had to have fallen asleep like Rip Van Winkle not to notice that the global economy is still on a precipice. Developed nations are knee-high in debt, while the economic steam train of China is slowing. And with Britain at loggerheads with France and Germany, the eurozone crisis and its ramifications will be felt long after the New Year celebrations have stopped.
These are nervous times and stock markets need to be underpinned by confidence as much as balance sheets.
Cash would seem the obvious place to put your money, but there is little to suggest that the Bank Rate is going to rise sharply any day soon. So this in turn will continue to suppress savings rates.
Investors are going to have to explore all the options to squeeze out as much as they can from their savings – and this may mean taking a step up the risk ladder.
Even gold, the classic safe haven had a rocky ride in 2011, beginning the year at around $1,400/oz, before shooting up to $1,900/oz in September (a record high) and then falling by around 20 per cent to close the year hovering around the $1,600/oz level.
So what about shares?
Many investment surveys suggest that many analysts expect shares to trade in a sideways range at best with the FTSE hovering around the 5,500-6,000 levels.
It is for this reason that blue-chips remain the port of call for many seasoned investors.
