Published February 24, 2012
Sometimes, the world feels like a James Bond movie. We’ve got international intrigue (see: the drama around Greece and European bailouts), backroom politics (see: super PACs and the primary debates) and even the threat of global war (see: U.S. tensions with Iran).
The economy is way more volatile than it used to be, even on average; in fact, some economists speculate that volatility may be the new norm.
So, we’d really love someone to tell us, “What does the future hold?” That may sound like a pie-in-the-sky request, but Société Générale, a very large European bank, has granted it. SocGen, as it’s called, has released its Global Economic Outlook report with its predictions for the global economy, and Business Insider has provided a useful, user-friendly summary.
Here are the highlights of SocGen’s predictions for different economies around the globe:
For the full coverage, check out Business Insider.What This Means for You as an Investor
First and foremost, the events of 2012 don’t actually have a lot of bearing on our investing portfolios, or at least they shouldn’t. Because the stock market is naturally volatile, you shouldn’t be putting your money into it unless you know for sure you won’t need it back within the next five years or more. And then, if you needed your money back within ten years, you’d probably choose “safer” investments than if you had decades before withdrawing your retirement investments.
Stock investments aren’t generally considered as “safe” as investments like bonds, because there’s a greater degree of risk. Of course, there’s also a greater potential upside. So, if you have money you’ll need back within the next decade or less, you probably shouldn’t have a ton of it invested in stocks, anyway.
The whole beauty of investing is that time has the ability to mediate risk. So if you plan to retire and withdraw your money 40 years from now, the world will be a very different place, and these hiccups along the way will be just that—speed bumps in our collective memory. As the mantra goes, we should aim to buy when prices are low, so we can sell later on when they’re higher. If anything, setbacks now mean that there’s more room to grow in the future.