Every year in different in markets, and new themes tend to emerge. The sooner one catches on to the theme, the better for the books. Like in 2012, the theme was increasing allocations in Asia, and the resultant fund flows. Almost all the markets received a boost, with huge flows taking the indices higher. Barring China, most major markets went up in double digits.
So far, this year has been high beta play, where investors are switching out of defensives into risky sectors. Can be a sign of revival for the broader markets, with both bonds and Gold disappointing last year. Yields are inching in US, and we may see average Joe trying to shift his portfolio into risk assest pretty soon. For, while the bonds returned around 2% last year, equities ran up 15%. Another year of similar returns, and we would definitely see US yields inching up.
This may finally be the year when China party begins. After years of frustrating investors with subdued performance, we may see Shanghai Composite flying soon.
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