Networth
Opportunities and pitfalls for investors in 2013
- Published: 27 Jan 2013 at 00.00
- Newspaper section: Spectrum
Last week, we looked at some topical considerations for new investments in 2013. Although 2012 was a mixed year, we noted that there were some exceptional winners and unusual losers.
We also looked at some of the pointers for equities, taking account of three major measures and influences. These are the equity risk premium (ERP) measure; the Chicago Board Options Exchange Volatility Index (VIX); and the price/earnings (P/E) ratios of individual companies. These all started 2013 in a positive way, pointing to equities being good value. Indeed, in the first three weeks of this year indices showed terrific gains, with the FTSE up 280 points, or 4.78%, more than the entire year 2012; the S&P500 rising 67 points or 4.7%; and the Hang Seng up 1,014 points or 4.48%.
Turning to property, we agreed that there are many diversified ways in which you can invest in properties, which is an essential part of any overall asset allocation of your net worth. Although property has very good long-term capital appreciation potential, be aware that the liquidity of such assets can be low even when the income potential is excellent.
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