At the end of every year, I start looking back for some ideas of what the future might hold. And it’s no different this time.
I suppose if you rely on memory alone, 2011 was full of action and loaded with surprises.
Here in the States, we saw the political acrimony increase as our politicians failed to meet one deadline after another and our country lost its vaunted AAA credit rating for the first time in modern history.
Of course, our political and fiscal woes have really been playing second fiddle to what’s been happening in Europe over the last 12 months — a dramatic crisis that will almost certainly reach a climax in the year ahead.
Throw in a natural-turned-nuclear disaster and 2011 certainly WAS a lively one.
Yet for all the thunder and lightning — and some rather large dips and rallies — the broad U.S. stock market finished up the year pretty close to where it started.
Meanwhile, interest rates continued to defy us all and stayed stubbornly low.
So what does the future hold?
I expect 2012 to be tumultuous but ultimately a year of great resolutions …
Citizens, politicians, and market participants will all cast their final votes on the issues that have been plaguing the world since the turn of the millennium — especially the deepest underlying issue of austerity vs. pie-in-the-sky consumption.
Since practically any type of certainty is better than the roller coaster we’ve been on, I think investors may finally be ready to start thinking about fundamentals again. I think they may be ready to accept that the world will get through its current set of problems. And I think the broad U.S. stock market will probably be higher than it is today.
Of course, capital appreciation is really a secondary concern for me.
Instead, I focus mostly on investments that produce INCOME.
As another year begins, I want to remind you of just why that is … and why focusing on income could make all the difference to your portfolio in 2012 and beyond.
You see, I have the radical notion that investments — particularly stocks — should work FOR US nearly all the time. Not just when they happen to catch a break and go up in value but rather by paying us to own them month in and month out, year in and year out.
Moreover, I expect them to pay out MORE the longer they’re held!
Ironically, once you find investments like this, the capital appreciation also comes naturally!
It doesn’t matter if we’re talking about rental properties or dividend stocks. The same basic principle applies.
Sure, there are also some interesting more speculative opportunities out there. And I have no problem taking advantage of those when I see them.
But for the bulk of my investing, I insist on “getting paid to own.”
This simple idea is what allowed me to get positive, market-spanking returns from both of the portfolios I run in Income Superstars this past year.
It’s why yet another year of low interest rates wouldn’t bother me one bit.
And, in fact, it’s why I plan on sleeping very well in 2012 … no matter what ultimately happens in the coming year!
Best wishes and Happy New Year,
Do You Own Gold?