2013: How Money should be placed ?

Best and Worst Investment in 2012 by Bloomberg

2012 only has a few hours left, let's take a look of how investment world fares and how I, personally, would like ahead for 2013. (As for usual caution: This article only presents my personal view. For investment, readers get to assess their own risk type and make their own prudential decisions)



2012: a year of turbulance and more ahead.

Big picture: Government spending and geographic transformation of economic power

all global financial instability hasn't come to an end yet, at least not for the year 2012. I won't expect a smooth 2013 in investment world since we have issues in the geopolitical scale. For example, I bet lots of people, instead of expecting the new year fireworks, are concerning about the fiscal cliff in Amercia now. Europe Union gets no better picture.  Growth would be the huge word for 2013, and lots of sovereign countries have no idea how to start that big G.

Hey, people talk of ememrging market, particularly, China. On one hand, I do believe the emerging market poise as an attractive investment targets. However, when budget problems looms they are not immute to it. Lots of countries are investing heavily on their public infrastruture. (as for Brazil gets two big games ahead and China looks for transformation to boost domestic demand) The question would naturally arise: HOW they are going to allocate their funding efficiently?

2013 would still be good year for emerging markets. I am particularly interested in ASEAN countries and Latin America for a longer horizon up for 3 years. A true "emerging" place on earth would be in Africa, while Chinese enterprises have already invested heavily for its natural resources, we would see further competition/growth in the region!

Yet, if we consider a longer investment horizon like 5 or 10 years, I still believe America and Eastern European bloc is a nicer alternatives. European Union will eventually be proven a good integration, if they propose a good Union-based fiscal policy, and as for America, I still believe their dynamic financial markets and endless innovation power.

Industries: Pharma has good perspective, Tech should looks for new niche. Spirits are still good and real estate might come back later the year.

1. Pharma: As aging would be an inevitable trend for the future, more and more funds would invest more into these sectors. Some drugs have more general applications and some target into niche markets. Yet, I think these sector would have solid cash inflows (as for profit) and generous payoff in 2013.

2. Tech: we have seen a very dynamic technology development in past years. Pad computer is the new hits, yet the product life would turn shorter and shorter when companies are competiting to draw more attention of comsumers. margins gotta be low when all these turn into like "everybody has one" products.
So, if you really wanna place some bids in tech, make sure you understand the product and how the company argue for better performance. I would say a niche product can always draw good feedback(also good stock price rallies), yet these stock cannot be held for very long term. Hit and RUN, when you got a chance to score!

(updated Jan 3rd, 2013) This news comes in time to update my view about tech stocks: Samsung Chairman urges for new businesses

3. Sin stocks, especially Alcohal: Usually I don't recommend money bids into sin stocks. However, drinks are always welcomed in bad times. Since uncertainty would remain high for the years to come, alcohal consumption would not drop substaintially. Also, when some countries may enjoy better growth in the coming years, they need something to celebrate their achievement. Bottoms up! Drinks could translate into good profits!

4. Real Estate: I will watch carefully for real estate markets, especially in Spain and America. Some region of America already pose signs of recovery, while Spanish housing markets seems not having a bottom yet. However, when the price drops we can always consider that as a good signal for profit potentials. Stay tuned, some good opportunites will come here.

Corporate Social Responsibilty: Virtures and Values are always the bottomline!
Above all, virtues and values are still the bottom line we are going to look for in 2013. Before you place any bid into a particular company/fund, make sure you check up how the management behave. We had a saying among Taiwanese investors, "When the tides turn, you would see who is swimming naked" Make sure you could see through the muddy waters (jeje) and invest into attractive/solid figures.     HAPPY 2013!