The year is close to done and dusted, and it would not be hyperbole to say it has been a very difficult one for investors.
The bad news is that on the surface 2012 looks no better with the central issue of disarray, Europe, unresolved.. The good news is companies are extremely healthy and order books are still full. In addition the emerging world has shown signs that inflation is starting to ease. Furthermore, in the US the housing market shows signs of having hit the bottom and unemployment is falling.
While the situation in Europe is bleak, it is these areas that could stage a tentative recovery and prevent a global recession.
One thing that investors have been reminded of this year is that asset class diversification is key to investing. If you had avoided bonds all together this year you would have missed precious gains.
Richard Peirson, manager of the AXA Framlington Managed Balanced fund, is cautious but shares the view that we are not headed for the abyss. His long-term performance shows that he has a habit of getting those calls right. The fund is split around 80% to equities and 20% in cash and bonds.
On the equity side he has recently been slowly tilting it towards companies that will benefit from a US recovery while in bonds, he has been getting very cautious about the lack of value available and has moved his exposure towards the shorter end of the market or into cash.
This is one to pick if you anticipate a difficult but not horrible outlook for the future.
Our Citywire Selection picks are based on our totally impartial analysis of the funds and managers we believe have established the best track records, operate the best investment strategies and offer the best potential for investors.