Many of my more specific country and sector calls also turned out to be right. For much of the year, for instance, I liked Germany, and by mid-December, German equities had risen nearly 28% in 2012 alone. Similarly, for much of 2012, I held an underweight view of India and through September, it had fallen 10%, underperforming the broader emerging market index by about 6%.
On the other hand, I wasn’t always right. I should have been more enthusiastic about high yield, which I held a neutral view of for most of the year and which did exceptionally well in 2012. At the same time, I was wrong about Russia and Taiwan, two emerging markets I advocated overweighting for much of 2012. But though I downgraded Taiwan in November, I’m remaining overweight Russia in 2013 for a number of reasons that I highlight in my January Investment Directions monthly market commentary.
So what else do I expect for 2013? I’m sticking with many of the calls I made last year, including an overweight to equities over bonds and to emerging markets over developed ones. Stay tuned to see how my 2013 calls play out.
Russ Koesterich, CFA, is the iShares Global Chief Investment Strategist.