There haven't been many years in the last 20 when relentless pessimism has been the right approach, but this has been one of them.
Looking back to the predictions I made last year, I see I was mired in gloom even then. I was concerned that the bubble in commercial property would burst (which it promptly did).
I was sure the UK residential property market could not keep going for another year. I doubt anyone took me seriously on this one as I was convinced of the same thing in 2005 and 2006 as well, but the end of 2007 does seem to be marking the end of the housing bubble.
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I also thought I'd prefer to steer clear of the US markets and of the dollar, a call that turned out to be reasonably sensible: the S&P 500 is up around 2.5% for the year as I write, but the weakening dollar (which started the year at $1.95 to the pound, fell to a low of $2.11 and is now at $2) means that for UK investors the return from the average US investment has probably been negative.
Next I said I preferred Europe's markets over the UK's given the iffy state of our property market and the consequent risks to consumer spending. Again, that turned out all right: the DJ Euro Stoxx 50 index is up 4% and the Dax (Germany has long been our favourite European market) up more than 18%, while the FTSE 100, despite its large number of mining stocks, is up a mere 0.7% on the year.
We've also done well with our commodity calls we've been recommending the big mining and oil stocks for a few years and in January 2007 I reiterated our view that the long-term bull market in commodities would continue. The two shares I hold in my own portfolio, Xstrata (XTA) and Shell (RSDB), haven't been the best performers in their sectors, but are still up 34% and 12% on the year.
My final tip from the first week of January 2007 was stick with gold'. That worked. Gold started the year at $630 and is now $800, a rise of 27%. But I did get one big thing wrong: I made Japan my favourite market for 2007. Whoops.
I may have thought it was time for share prices in Tokyo to start reflecting the market's "improved fundamentals", as I put it, but it seems no one else did: the Nikkei 225 is off 12% so far this year and the smaller company indices have done even worse. Apologies for that, but I hope that if you invested in Japan on our advice your gains from our other tips have more than outweighed your losses.
So what of next year? I'll give you my own thoughts in January (right now I can't think of anything positive to say I suspect that won't change, but I'll think about it over Christmas). In this issue we've asked all our favourite investment experts to tell us where they'll be spending in 2008. Some of their answers, such as Dan Denning's advice to buy mid-sized mining firms, won't surprise you but some of the others (Sven Lorenz's African property tip, for example) probably will.
