Well, Winter draws on, and another year is nearly over. As far as investments are concerned, this year has not been short of excitement (a trifle too much, for some, I fear). Whilst there seems to have been an overriding air of economic gloom, it hasn’t been the worst of years for most markets. Despite all the concerns over the weaker countries in the Euro-zone, and the lack of growth in the greater part of the western world, many markets are higher than they started the year.

I met with one of the more colourful investment commentators recently, who, despite being somewhat scathing about a number of the West’s politicians, was rather positive about many of the companies that make up the major indices in world markets, and many of the economies in those markets. He felt that, all in all, the picture was no where near as gloomy as many financial correspondents would have us believe. One noted BBC ‘expert’ spoke of the world being practically in recession, whereas currently, the average growth rate worldwide is something of the order of 4%. The same ‘expert’ also seemed to think that the UK did not have a manufacturing industry any more: in reality the UK is manufacturing – and exporting – more than it has for years! Clearly, there are areas that are enjoying good growth, (China, India, Brazil etc.) that balance those of us who are just managing to bump along the road of sub 1% growth, but this has had the effect of fuelling the surrounding economies to a degree, and providing a home for many of the goods and services that emanate from the West.

As I write, the FTSE100 is pretty much where it was a year ago, having been both up and down by about 10% during the year, and the Dow Jones Industrial Average is up by a little over 5% over the same period. Interestingly, the FTSE 10 year index-linked gilt index is up about 20% since November 2010, an old favourite property investment trust of mine by 40% and one investing in natural resources by over 60%.

In essence, the story of the year has been that it is important to have a good, balanced spread of assets in any investment portfolio, and – as ever – to choose managers that have a proven track record of making money in their chosen sector. Use the right products for your particular circumstances, don’t put all your eggs in one basket, and if you can, let time do the work for you. Remember that markets, like many other things, are cyclical, and that as sure as the seasons will change, economies will improve, and markets will give good returns. It is easier to start with a little, as early as possible, rather than put off saving until it is too late to catch up.

On those words of wisdom, I’ll take my leave. Have a happy Christmas, and a healthy and peaceful New Year.

David Foot