Why this reporting season is key

ON EUROPE

Who would have expected that European equities would be one of the best performing asset categories globally in 2012 with a return in euros of 18.6%?

Perfect foresight on political and economic developments at the start of the year would have served only to hinder your abilities to get that forecast right. The European equity index has had more twists and turns than a good thriller over the past few years and 2012 was no exception. The major variable over the year was confidence, as growth expectations – even for the previously impervious German economy – hit a low at the end of the period. Investors started the year dwelling excessively on the negatives and ended the year focusing on the positives even though, from a big picture pers...