Starting any new year there is an abundance of prediction posts that have been popping up for the past few weeks. Think of it more as an educated guess on what’s to come in the next year.
Making predictions offers a chance at a better understanding of the financial world around us and how to invest in it accordingly. Plus it’s just downright fun! Sometimes we’re right, others we’ll be wrong. But it’s a good exercise for investors to pick up so you can plan your allocation accordingly.
In an effort to get the mental juices flowing after the New Year’s celebration, here’s my predictions for 2012.
Europe
The Euro doesn’t break, but it does become the most expensive currency ever to maintain. The final price tag for keeping the Euro alive closes in on $3 trillion when it’s all said and done. Too bad they didn’t act sooner.
Don’t expect the Euro mess to end quickly either. I’m looking at a timeline of 6-9 months. Sometime around July sounds best. August is a big vacation month over there and no one will want to deal with this after an extended holiday. Until then, expect volatility similar to what was seen this past year. This whole event is far from over.
Part of having a finance blog offers me the opportunity to add my two cents every now and then. With that in mind I’ve come up with the Novel Investor Best and Worst Awards for 2011, relating to stocks and ETFs that may or may not have been part of your portfolio this past year.
Starting January 1, 2012 new cost basis reporting changes will take effect regarding mutual funds, ETFs, and DRIPs (Dividend ReInvestment Plans). Under the new changes, the IRS will require all brokerages and fund companies to track the purchase and sale price of these assets. These are similar to the