We finished 2011 with little growth in investment indices. The S&P 500 was basically flat and the NASDAQ was down nearly 2 percent.

Saving rates for the year were well under 1/2 of 1 percent.
Unfortunately, 2012 doesn't look much better than 2011. We are going to see the same kind of volatility that we experienced in 2011. This left investors uneasy and contributed to a lack of confidence in investments.

China is experiencing a slowing of it's previously robust growth. Both India and Brazil experienced losses of over 20 percent in their stock markets. Clearly emerging economies are unlikely to continue the rapid growth of recent years.

Europe has not successfully addressed it's credit issues. There is little confidence in the continent's leaders abilities to solve the debt problems.

United States companies earnings outlooks have been disappointing. The tech sector in particular has shown increasing weakness. Earnings for the S&P companies are projected at 9.9 percent, down from 13 percent in 2011.

As we have advised in the past, maintaining a broadly diversified portfolio is the most effective way to realize gains in a challenging environment.

For specific portfolio strategies, contact us at anadolna@associatesgroupinc.com