As the year-end comes to a close, we find that for all of our actions and concerns, the S&P 500 finished the year unchanged. The lost decade of stock investing continues..or so the pundits are declaring.
The truth is that the US economy is growing, albeit slowly. I expect this to continue through 2012. Companies are still very lean. Due to high unemployment, they have been able to constrain their labor/manufacturing costs and they are generating cash at a brisk pace.
2012 is going to be the year that companies finally start to emerge from their bunkers and start spending some of that cash. Mergers and acquisitions are going to occur, capital expenditures will grow, and the unemployment rate will continue it’s decline. It is not going to be easy. We will not be able to avoid the volatility. The U.S. Election, the European Debt Crisis, and the Arab Spring movements will continue to strain investor’s attention span. They will be wondering, “What shoe is going to drop next?”.
The successful investors in 2012 will be those who will see past the crises and notice the companies that are growing, the industries that are expanding and the U.S. consumer who is continuing to spend money.