Eurozone crisis will create fresh opportunities
Investors need to be ready to change course quickly this year says one London investment expert.
Financial markets are heading for a crunch point which will create new opportunities for investors – that's the view of investment adviser Brian Dennehy, who this week published the 21st annual edition of his firm's TopFunds guide.
"We could encounter a significant turning point in 2012 as the eurozone crisis stumbles to new extremes," Mr Dennehy said. "It will force more effective action by politicians and create long-awaited opportunities for bargain-hunting investors."
He believes politics will play an important part in effective investment planning this year.
"Any investor or adviser who chooses to ignore the political angle in their investment planning is being negligent," he warned.
"However the catalyst for greater turbulence throughout 2012 will be angry voters, while in 2011 it was incompetent politicians."
He said investors hoping to beat the markets this year need to be prepared to change course under conditions of great uncertainty.
The problem, of course, is the ongoing attempts to rescue the eurozone by restructuring.
The changes will impose limits on the spending of all members of the eurozone, which will be the greatest constitutional change for the countries affected since 1945. The fact that the proposed spending limits will be enforced by the European Commission effectively means a loss of sovereignty in all 17 eurozone countries, points out Mr Dennehy. He said the changes will have a greater impact than the introduction of the euro.
"But the proposal still has to be approved by individual governments and, crucially, by voters in many cases," he pointed out. "Will people in Spain or Greece or France accept that decisions on new hospitals or schools will effectively be decided in Brussels or Frankfurt?"
So what opportunities could that create for British investors? "There are plenty of individual UK businesses that are adjusting well to a difficult environment," said Mr Dennehy. As a consequence he suggests looking at UK growth funds.
"Even in the current difficult conditions there are UK growth funds performing commendably, " he said, mentioning the JOHCM UK Opportunities fund, which grew 4.3 per cent last year, and the Liontrust Special Situations, which was up 7.5 per cent in 2011. However, he added that investing solely in the UK will mean missing out on overseas potential.
Mr Dennehy believes now is not the time to buy into the US, but that, further afield, investors seeking income could do well to look east.
"Asian economies are close to a new upswing," he predicted. "In the short term, the storms reaching out from the eurozone will delay a positive response by Asian stock markets, but that turnaround will come."
He picked the Newton Asian Income fund's outstanding track record for growth and said, looking ahead, that Henderson's Asian Dividend Income has an interesting edge with its greater exposure in China.
"There are also some outstanding funds with a global mandate," Mr Dennehy said, citing Newton Global Higher Income, M&G Global Dividend and Artemis Global Income.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Board creates magnetic field to achieve lift
Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets
George Lucas criticises the major Hollywood film studios
Film follows park rangers in the Congo
Does Chris Grayling realise what a vague concept he is dealing with?
Parties threaten resort's image as a family destination
Mark Dampier: Woodford’s young companies could be the stars of the future
'Hundreds of thousands' could be hit by second HMRC tax blunder
Weekly Money: Round-up of the personal finance stories you may have missed 13-17 October
The 10 Best money-saving sites
Bank-beating exchange rates on your international payments
- 1 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 2 Banksy arrest hoax: Internet duped by fake report claiming street artist's identity has been revealed
- 3 Drink alcohol and eat meat to improve male fertility - but cut down on coffee, studies suggest
- 4 Former East 17 frontman Brian Harvey turns up at Downing Street and 'demands to speak to Prime Minister'
- 5 The inventor of the Facebook 'like' button says he never made a 'dislike' button because he feared the 'unfortunate consequences'
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
Amal Alamuddin calls for the return of the Elgin Marbles from Britain: 'Injustice has persisted for too long'
London bus driver 'kicks gay couple off for kissing'
Lord Freud: Tory welfare minister apologises after saying disabled people are 'not worth’ the minimum wage
iJobs Money & Business
£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...
£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...
£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
Day In a Page
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village