13th January 2012
Say, back at the start of last year, you had been asked to predict the developed-world stockmarket that would outperform all others over the course of 2011, which one would you have chosen?
Maybe you would have gone for Germany or perhaps, given its solid record of positive performance in the third year of a presidential election cycle, the US.
If you had, you would have been wrong and it is no slur on your investment skills to suggest that, even with hindsight and knowing everything you do today about what happened to the economies of the world in 2011, you still might not pick the right answer.
For, according to data from Societe Generale, with the US's S&P 500 index ending the year where it started, the only developed-world stockmarket to finish 2011 up in absolute terms – in the process outperforming leading emerging markets such as Mexico, South Africa, South Korea and the ‘BRIC' powerhouses of Brazil, Russia, India and China – was … Ireland.
OK, so its absolute performance was just +0.6% but, at the start of last year and given everything you knew about the country's economy, its housing market, its banks, the state of the euro and so forth, would you even have expected that? Over 2011, the US was flat as a pancake and Germany fell almost 15% while the emerging markets as a whole lost 20%. Ireland may have risen a mere 0.6% but it was the only national equity market of any size to manage even that and, in doing so, it significantly outperformed most other developed markets.
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