Another dangerous year

In Investments on 30/03/2011 at 7:48 am

As the Economist said, This was supposed to be a stress-free year for the global economy. By January the financial crisis had faded and Europe’s sovereign-debt crisis seemed less acute. America’s economy was resurgent. Investors piled into equities and sold some of the government bonds they’d bought for troubled times. If there was a worry, it was that emerging economies would grow too quickly, inflating commodity prices.

The year without crisis is not to be. First, Arabian upheaval put oil markets on edge. Then earthquake, tsunami and a nuclear accident clobbered the world’s third-largest economy.

The flight to Western stock markets from developing markets is not looking so smart because higher oil prices could lead to a recession in the West. Investing in developing markets remains problemtic because higher inoil prices will make it more imperative for the governments in the developing countries to fight inflation,

Bonds don’t look the safe havens because there is the belief that whether they like it or not, developed countries have to raise interest rates.

Time to go go into cash? Err what currency? S$ is a safe currency but interest rates are “peanuts”.

Heck, I’ll leave with the CPF the funds I can withdraw (I’m past 55). Juz hope that the rules don’t change, and these funds become “frozen” to provide me with more old-age protection.

Whoever said investing is easy?


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