Business Insider posted a great year end wrap-up of charts. I thought I’d post a couple of my own favorite charts and then highlight some of theirs. Its long but well worth checking out.
Don’t take our word for it : Several asset managers make long term stock market return forecasts that are very low. Interesting but this is unrelated to short term drivers of the market.
Gangnam Style viral video sends DI corp to stratosphere and back again. Source: Bloomberg
Now onto some of the great charts posted at business insider.
The Most Important Charts of 2012
I thought I would stay away from too many Europe, Fiscal Cliff or Apple slides since they have dominated the media. Having said that, lets start with the one Europe slide….
Europe certainly influenced trader perceptions for the last couple years. However, the 4-year presidential cycle did provide some guidance to traders…
And yet the market was also tremendously intervention and monetary policy driven….
Deleveraging has dominated headlines as well, including on this blog. But while the private sector is deleveraging the public sector is largely offsetting this:
Looking under the hood, the economic returns to debt growth are diminishing and have been for decades. They are quickly approaching zero:
While some of the economic fundamentals don’t look spectacular, the market has done reasonably well this year. You wouldn’t know that consumers were deleveraging from the absolute and relative performance of the consumer discretionary sector:
Some of this strength is being caused by the recovery in housing and rally in housing stocks:
Another key insight that has proven useful in navigating this market cycle is the sectoral balances analysis approach seen below. I’m still working on incorporating this into my investment approach.
Looking at the long term now, demographics will likely play a role in driving asset prices. This chart looks to bearish to me but there will certainly be a drag in some markets with the number of retirees growing and working age population shrinking.
Lastly, an interesting chart trying to time the market using relative hedge fund exposure. Interesting take, might need some further investigation.