While 2012 saw equities muddle along, 2013 should prove to be a very 'interesting' year. Here is a list of articles I'm reading now to form a bias for the next 12 months...
The 96 Charts That Have To Be Seen To Believed For 2013 - Global financial markets may be a bit of a mess right now, but this excellent report from JP Morgan makes some sense of it...
"The 'death of equities' chatter seems odd, given how well the mainsail of corporate cash flow is doing (c18); dividend growth rates are the highest in six decades. any approach using interest rates indicates that equities are still cheap. Since 1960, the S&P has not generated negative 1-year returns when the spread between S&P earnings yields and Treasury yields is this high."
Recession Risk: The Threat Of Rising Interest Rates - An interesting economic hypothesis that has interest rates rising in the US regardless of what the Fed does...
"...if rising interest rates are the consequence of even modestly accelerating inflation, all bets are off. At that point, the long-dormant so-called "bond vigilantes" (which are nothing more than ordinary investors that sell their bonds to protect themselves against inflation) will take over and the Fed - whose real powers are quite limited - will be forced to bow to the sovereignty of market forces and essentially join the bond vigilantes in orchestrating a rise in interest rates."
Central Bank Watch (RBC Economics) - Again, another call on rising interest rates, this time in Canada....
"We expect the BoC to be in position to raise rates in Q3/13 and maintain a gradual pace of reducing stimulus, with the overnight rate ending 2014 at 2.00%"
So how to profit from this?:
Bond ETFs to fall if rates rise
"In the new normal, debt continues to pile up to the heavens, and yet interest rates keep plummeting. Governments issue vast and expanding amounts of debt, only to have their central banks subsequently buy equally large amounts of the very same bonds in order to keep rates artificially low. ... investors are once again facing the prospect of a significant dislocation in the markets, possibly driving them further into the land of non-existent yield."
