It can be difficult to evaluate the current economic standing in the United States, as sensationalist reporting often creates a distorted view of the nation's finances. Despite this, it appears as though the U.S. economy is finally embarking on an upward curve, with property prices soaring by 7.4% and unemployment remaining at 7.8% throughout December 2012.
The signing of the fiscal cliff deal seems to have played a pivotal role in reinforcing the nation's tentative growth, which was reflected by a surge in investor confidence at the turn of the year. In total, investors in U.S.-based funds committed $7.53 billion into stock mutual funds, and this represented the highest volume of capital since 2001. All things considered, the fiscal portents for 2013 appear to be far brighter than they were just six months ago.
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Investing in 2013: Where to Commit Your Capital
While the U.S. is experiencing a sustained growth period, however, the global economy remains mired in instability and uncertainty. Take the ongoing fiscal crisis in the eurozone, for example, which despite showing signs of stabilizing remains a viable threat to long-term economic prosperity. This volatility provides an interesting challenge to investors in 2013, who must navigate both the economic tumult and financial market intricacies if their portfolios are to deliver returns.
The first thing to remember is that this uncertainty can be positive for some investors, especially those looking to trade in equities and shares. As a basic principle, macroeconomic instability is known to trigger diminishing stock prices, which subsequently offer tremendous value as long-term investment vehicles. As long as the eurozone crisis continues to rage, investors with a long-term outlook can purchase plummeting, blue chip shares that will regain their value while the global economy recovers throughout 2013 and beyond.
Another key investment trend in 2013 involves the substantial growth of emerging Asian economies presenting new and exciting opportunities for profitability. Nations such as China and Japan provide a relevant case in point, as, despite mixed economic portents, their markets have benefited from record low valuations. In addition, both nations boast high rates of productivity and burgeoning stability, which again make them ideal for investors who are seeking long-term gains.
Investing in Precious Metal and Property: The Importance of Tangible Assets
Another investment option compatible with economic turbulence is gold, as its inherent value provides security during times of austerity. It is therefore expected to enjoy a prosperous 2013, on the back of a 12-year upward price trend that has seen its value soar from $250 to $1,700 per troy ounce. While analysts are predicting that the value of gold will peak during the next 12 months and then begin to fall in line with an improving global economy, this market currently presents a sound and profitable investment option.
While silver is still referred to as the poor man's gold within investment circles, there is a definite sense that this is set to change in 2013. Although critics often deride a material that has been used primarily as an industrial metal during the last decade, it is hard to ignore the fact that it has experienced a 600% price rise since 2003, while also beginning to earn a greater reputation as a precious metal and source of wealth. With some forecasts suggesting that the price per troy ounce could soar to $60 by the end of 2014, the next 12 months provide an ideal opportunity to claim a faction of this thriving market.
In terms of tangible assets, property may also provide a profitable investment opportunity in 2013. Housing markets throughout the world made a sustained recovery during the last six months of 2012, with the U.S. in particular benefiting from a 7.4% increase in property prices within this period. With this growth predicted to continue for the duration of 2013, those who are interested in investing in property may need to act quickly before they are priced out of the market and activity begins to dwindle.
The Bottom Line
This diversity of investment options and their potential reflects an improving economy, which has continued to build momentum during the last three financial quarters. With emerging economies continuing to develop alongside their more established contemporaries, there are now a wider range of markets and financial instruments that can deliver sizable, long-term returns. The key for individuals is to determine which suits them best, in terms of their disposable income levels, strategy and wider investment philosophy.
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