If there is anything that high net-worth individuals learned through the last two years of chaotic investment climate, it is that things will happen when you least expect them. Nobody can claim they foresaw the dramatic collapse of asset prices in 2008 and hardly was there any credible soul who predicted the dramatic V-shaped recovery of stockmarkets across the world in early 2009.

 

But the ability to maintain a wide-eyed view on things and being ready to seize all possibilities and escape routes when the opportunity presents itself is clearly a valuable trait for any investor.

 

This is the kind of thinking behind the initiative of Bank Sarasin chief investment officer Burkhard Varnholt when he expounded some words of wisdom for investors to consider this year. H-listed developments that could waylay or subvert well-laid plans, springing surprises − negative or otherwise − that could have a major impact on how investors plan their wealth.

 

The Asset read through the “surprises” and was not really surprised; since most of them are what some economists are predicting at the moment. One prediction about a possible popular uprising in Iran that will topple the existing regime and open new opportunities for the Middle East, is a wildly exciting possibility but does that eventuality seem likely? Gold breaching USD1,500 per ounce would hardly be surprising but we would be really surprised if it goes back to USD800!

 

Varnholt is careful to say that his list of surprises for investors is not in the nature of predictions but is only intended to provoke discussion. “While forecasting surprises is, of course, an exercise in self-contradiction, pondering the unexpected can help us avoid the mistake of uncritically extrapolating the past into the future.”

 

Varnholt says it helps to think in scenarios rather than in rigid patterns. “Our clients expect us to think critically and creatively, and then to respond with recommendations, products and services.”

 

Varholt’s ten “surprises” that investors should watch out for in 2010:

 

1. Stocks perform much better in 2010 than expected. While chronic structural problems continue to delay recovery in the G4 economies, stocks boom particularly in dividend- and growth-rich sectors, such as infrastructure, renewable energy, water and sustainable real estate.

 

2. Growth disparities and political differences increase pressure on the US dollar pegs in Asia, stoking inflation and discontent. Asian currencies appreciate broadly for the first time.

 

3. The price of gold climbs to a peak of USD1,500 per ounce.

 

4. Rather than further write-downs, some commercial banks revalue their loan portfolios upward on the back of fewer defaults.

 

5. Asia and Latin America experience the highest economic growth rates globally fuelled by surging domestic demand, infrastructure expansion and robust exports. Africa also records strong growth.

 

6. A structural increase in demand for government bonds in the G4 countries leads to flatter yield curves at low interest rates. Deflationary concerns spark a frantic search for income producing investments.

 

7. Major countries plan a hike in the retirement age. Since the change increases economic growth potential, stockmarkets respond positively to the news.

 

8. While prices for fossil fuels fall due to global improvements in energy efficiency, prices for agricultural goods reach record highs.

 

9. Africa ranks among the winners not just on the football field, but on the stockmarket as well.

 

10. A popular uprising in Iran overthrows the government, inspiring political and economic hope far beyond central Asia.