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Year 2011 was good from a returns perspective ost investors can be thankful for their investment losses last year. It could have been significantly worse. On a relative basis, 2011 was a good year. During the last 12 months we have seen significant reasons for the stock markets to plunge in value -- it started with the devastating earthquake/tsunami in Japan. Then there was the incredibly fast Arab Spring. Many countries that had tolerated cruel leadership from dictators for decades rose up and drove their tyrants from power. Political change was possible because of technology. Instant mass communication through social networking allowed decades of political change to be compressed into just a few short months. The economic news was bad. The U.S. had its credit rating downgraded by Standard and Poor's (a financial market rating and intelligence service). They had not recovered from their recent real estate sub-prime woes and their debt was continuing to climb at a dangerous rate. All of this was magnified because of the political stalemate between the Democrats and Republicans. The largest economy in the world was in financial trouble with no ability to manage its way 13 · Thursday, January 19, 2012 OAKVILLE BEAVER · www.insideHALTON.com M to a stronger future. More significant was the Euro-zone sovereign debt crisis. Greece was bankrupt and was resisting the economic reform demands from stronger countries offering financial aid. Then Italy was in financial danger of collapse. Italy is the most indebted country in Europe and the third most indebted in the world. Many worried that Italy's economy was too big to bail out. The world was experiencing one of the most unsettling periods in recent years. Stock markets around the globe were volatile and investors were nervous. From an anxiety perspective, last year was terrible. From an actual return perspective, the results were not that bad. The Canadian stock market as measured by the S&P/TSX (Standard and Poor's/Toronto Stock Exchange Composite) was down 11 per cent. The U.S. market as measured by the S&P 500 was close to break-even with only a very slight performance. disaster in Japan, political unrest in sevdecline. Despite the Canadian economy being eral Arab countries and economic probConventional stronger than the U.S., our dollar declined lems in the U.S. and Europe. wisdom indicat- 2.2 per cent. Many investors are happy the year is ed Canada was The world stock markets were down over because it has been one of the most economically and the MCSI World Index declined 6.5 stressful from an investment perspecstrong and the per cent -- this index includes Europe tive. U.S. was not. and this slight decline is the most surprisAll of that was the bad news. The good By Peter Watson Canada was ing. news is that the losses in the major stock therefore the With all of Europe's problems, a markets were relatively small. better place to decline in the world stock markets by Relatively speaking, it was a very good invest. only 6.5 per cent is a bargain. year. Conventional wisdom is the way The year 2011 was extreme. -- Submitted by Peter Watson, investors try to outguess the performance The world experienced a natural MBA, CFP, R.F.P., CIM, FCSI. of the stock market. Readers will know from past articles that academic research proves this cannot be done successfully. A valuable lesson can be learned from last year's Canadian and U.S. stock market performance. Junior Kindergarten Senior Kindergarten Diversify your Note: If your child is currently attending must be 5 years old must be 4 years old portfolio geographone of our schools for Junior Kindergarten, by December 31, 2012 by December 31, 2012 ically and do not do not register for Senior Kindergarten. attempt to predict To determine your designated home school, access our website www.hdsb.ca and click on the the stock market Dollars & Sense School Year 2012-2013 Junior/Senior Kindergarten REGISTER NOW "Schools" tab, then "School Locator". Call your designated school to find out which dates have been established for Kindergarten registration. Please bring the following original documents with you to register: If you are not the child's parent, or if you have sole custody, please bring proof of custody (court order). Please register your child by February 17, 2012. For further information, please contact: Note: Board website at www.hdsb.ca / 905-842-2486 : (Halton Multicultural Council)