At the end of the year, I generally write about how the returns of the various categories of mutual funds and other investments have been during the year.
However, this year I'm not so sure whether anyone would have all that much enthusiasm for such an exercise for 2011.
It's been a most forgettable year and everyone who has any kind of market-linked investment knows very well what they have lost and would like to put that behind them as soon as possible. My putting some percentages to the pain will probably be neither interesting nor useful.
Unfortunately, most people seem to see as many problems looking forward as they do when they look back. It's hard to recall a time when the general mood among investors and businessmen was of such pessimism. So much so that one has to wonder how much of this actually makes sense on any rational basis. Remember the phrase 'irrational exuberance' that was used to describe the heady days of 2003-2007?
Now, it might just be the opposite. We could well be in an 'irrational pessimism' or an 'irrational melancholy' phase.
We could be in a negative bubble (if you could visualise such a thing) and which is as hard to see from inside as the normal sort of bubbles are.
It's not hard to trot out a litany of economic catastrophes that could hit us. However, the mental weightage that we assign to them could be excessive.
The problem is that some of these catastrophes could be self-fulfilling prophecies.
If a whole lot of businesses don't invest in their future, well then the investments won't be justified. And that's the same for the investment markets. The irrational exuberance was not justifiable, but I think some rational exuberance may be in order.