5 reasons why investors should be optimistic in 2013
With a turbulent few years for investors in the finance sector, more positive whispers are emerging around the start of this new year. Should we be listening to them? Here are five reasons I’ve picked out that are pointing people back towards investing optimistically.
1. Global regulators agree on bank asset rules
Lots of news today on the regulators agreeing on and easing bank asset rules. What does this mean? What are the rules? In future banks must hold enough cash and assets such as equities, corporate and government bonds that can easily be sold, to tide them over during an acute 30-day crisis. Hurray! No more shocks to the system like Northern Rock…hopefully.
Yes I wrote about this a few days ago but surely regulation, a bit more security and the prospect of customers investing again means a rise in the account manager? And if they’re there, use them!
3. The likelihood of improved economic conditions in China and the US
Fiscal cliff etc etc. But the FTSE is giving an income of around 3.7 per cent compared to five-year gilts yields of 0.8 per cent and 10-year gilt yields of 1.8 per cent and China has been growing for years, we all know that. China being key for commodities due to that growth and industrialisation.
4. Cheaper Global Emerging Markets
Jason Hollands, a managing director at Bestinvest, speaking to the Independent said “Global emerging market equities are now as cheap as they have been in 12 years, while persistent negative newsflow from the eurozone has resulted in prolonged outflows from European equities, which has led to an almost indiscriminate discount placed on European-domiciled stocks. As a result, the valuation gap between European global businesses and their US peers is at its widest level in a decade.”
Jason provides us with some valid reasons to invest in emerging markets other than China.
5. Thriving technology markets
The fear of technology investments and the burst of the dot.com bubble means that interest in this area varies, however the technology sector is thriving. Seemingly showing us it is time to move on and that UK tech firms, for example, may well provide some interesting prospects.
And there you go. My personal investments are, shall we say, limited. I’d love to hear what you real investors think and perhaps what some more specific areas for investment would be this year. Leave us your comments below.