When the German band, Scorpions, sang the song ‘Winds of Change’, everyone had stood up and noticed that the only static in life is indeed-Change. Two decades after the song was declared  super-hit (especially amongst the budding guitarists of the yesteryears), the song is again coming to the limelight against the backdrop of the fast changing economical and political situations across the globe with countries struggling for some stability. The wheels of time have turned yet again and this time will be a real tester for all concerned.

The situations on both sides of the Atlantic are showing worrying signs. The worry is-when the euro zone is showing signs of recovery propositions, the US is showing signs of negative impressions. On the contrary, as witnessed in recent times, when the US is showing signs of attaining recovery grounds, the Euro zone is turning negative. Investors are baffled about the turn of recent events and its consequent affect on the market.

People tend to view the future through the lens of the past. If you are under 70, you have lived almost all your life in a world where economic growth was a fact of normal life. It would have surely slowed from time to time but it always reversed as the clock ticked on. All you had to do is to stick with it. Whether you are an investor, a businessman, or a household, you learned that as long as you could stay the course, you would probably come out okay at the end. Your investments, business and your ultimate standard of living would go up. How easy it was to relate and correlate different aspects of life in one!

But now, something big has happened. Something has changed. Instead of believing that recovery is right around the corner, we have begun to think that the recovery might never come. The major changes in our attitudes will come in 8 different areas:

1. Frugality on global consumerism
2. Austerity of sovereign aspects
3. Nationalism taking over from globalization
4. Political movement along the ideological and fiscal spectrum
5. Geopolitical changes
6. Changes in inflationary/deflationary expectations
7. Changes in growth expectations
8. Changes in asset allocation preference

The year 2012 will be important in the global economical trajectory- whether it can reverse the gear onto higher grounds or will it slump towards further ruins. Times are indeed changing and we in the midst of it all!