People make New Year resolutions to embrace a change in their life by commencing or ending an integral aspect. But how many of us do follow it? Someone had rightly quoted "Habits die hard”. It is the habits that individuals are recognized through. So when the individual tries to change an aspect, he/she will lose the individualism through which one is known. Investors all over the globe are also making new resolutions to eradicate the mistakes of the past year. They are entering the New Year with a sense of hope. The mistakes of the previous year-the bad picks and the wrong guesses-are all but forgotten. New cash is injected through the system as the January effect will be implemented.

However, it would be no surprise if history repeated itself in 2012. True, Europe may already be in recession and the region’s policy makers have not yet finalized a solution for the sovereign-debt crisis. The year 2011 was such a dismal year for European equities that many investors will hope that the bad news is all but erased. On the other side of the Atlantic, investors can be pretty sure about the direction of the monetary policy. The Federal Reserve has already indicated that it will not raise rates, and another round of QE might be introduced if the American economy continues to wobble. The developing world will probably present a more mixed picture, but easing will be more common than tightening.

Geopolitical risks could also undermine the market. The Middle East remains volatile. Egypt’s revolution could go sour and Syria and Iran is prone to sudden eruptions. The fundamental problem that dogged the global economy, and equity markets, since 2008 will remain. Growth is likely to be as slow as economies will remain scathed from the debt crisis. Authorities can intervene to prevent a repeat of the Depression but the result is still likely to be sluggish rebounds with more frequent recessions. Coupled with the effect of high commodity prices, it is hard to generate the kind of multi-year rally that marked the marked the 1980s through the early 1990s. This does not mean investors cannot make money. Investors especially in the commodity market can benefit since it provides a two-way trading mechanism.

At the start of 2011 almost everyone was bullish. The outcome was immensely disappointing. As 2012 begins, the mood is more restrained than before. Let’s hope that the global economy gathers positive momentum for a better year for investments. For now, let’s enjoy the celebrations with renewed hope and optimism as we usher in the New Year.

Happy New Year readers and see you all in 2012!