Climbing the financial Wall of Worry in 2013
Illustration by Matt Wuerker by Bob Franko Two years ago, as the economy was beginning to recover, I wrote about “The Start of a Virtuous Cycle.” Last year, I said the future looked bright for 2012. Looking back, both articles were pretty much on point. Things turned around in 2011, and then we looked back on 2012 and marveled at how far we had come, despite the rocky feeling we had along the way. Now we face a year of worries. First it was the Fiscal Cliff, soon it will be the Debt Ceiling, maybe Europe will become a problem again, before long it will be Inflation, and who knows what other gremlins lurk in our corners. Investment professionals love to worry. They even have a phrase for it, they call it climbing a Wall of Worry. The Wall of Worry usually portends well for investment returns because investors nibble cautiously. As we saw after 2006-2007, exuberance can be a lot more worrisome. I expect that in 2013 we will all face the Wall of Worry. Home prices will rise gradually, but not fast enough for most of us. Mortgage rates will stay low, but not as low as 2012. And, believe it or not, the State of California will have a surplus, thanks in large part to 2012. The higher…
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