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If not stocks, what?

By Sheyna Steiner ·
Friday, December 16, 2011
Posted: 8 am ET

Oh December, month of lists detailing the best and worst of the outgoing year and forecasts telling us what to expect from the coming year.

Today's forecast for 2012 comes from the CFA Institute, the world's largest association of investment professionals and granter of the prestigious Chartered Financial Analyst designation.

In their Global Market Sentiment Survey 2012, released earlier this month, the institute surveyed members around the globe to get their perspective on the year ahead for global markets and the investment profession.

The one thing investment professionals around the world mostly agree about is the belief that the sovereign debt crisis will not improve in 2012; 75 percent of respondents say the European debt situation will continue.

There's no consensus, though, on what will happen to the global economy. According to the survey respondents, the global market economy could expand, according to 34 percent of those surveyed, contract, according to 29 percent, or stay roughly about the same, according to 34 percent.

Most American investment professionals believe that the local market's economy will either expand or stay about the same, with 44 percent each, and only 12 percent believe it will contract.

The survey also asked respondents to rank asset classes in order of expected total return in the global markets in 2012.

Worldwide, 41 percent believe equities will lead in returns, followed by precious metals at 25 percent and 15 percent say commodities.

Investors that use a diversified strategy don't need to worry too much about being in the winning asset classes. Most investments run in cycles, sometimes small-caps do great, sometimes emerging markets and so on. Owning a little bit of each asset class means you always have some winners.

For a recent Bankrate story, "12 financial tips for 2012," I spoke with Chicago-based CFP Julie Murphy Casserly who told me that the prevailing cycle favors tangible assets -- such as precious metals and commodities -- over intangible assets such as stocks.

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