Panel forecasts financial events of 2013

To their credit, our panel got its strategy largely right in 2013.

With the benefit of hindsight, the right strategy was to be fully invested in risk assets such as equities and London's booming commercial property market. Government bond markets, emerging markets equities and commodities were to be avoided, while there should have been a gradual exit from investment-grade corporate bonds.

Broadly speaking, the panel called correctly.

A look at their scores for February 2013 reveals their continuing dislike of cash, reflected in a lowly average score of 2.2, and the same low score for UK government bonds. In global bonds, scores averaged 2.8. So far, so good.

To read our panel's outlook for major economies in 2014 , see: US Fed changeover poses key challenges.

Human frailties exposed

However, when we examine individual equity sectors, human frailties are exposed. Most stayed loyal to the US boom. One man, Chris Wyllie, correctly pinned his hopes on European equities, while Rob Burdett was an enthusiast for Japan.

A year ago, though, only Keith Wade foresaw the lacklustre performance of emerging market equities. US equities, as measured by the Standard & Poor's 500 index, were up 30% in 2013, while the Nasdaq Composite index climbed 39%.

Our panellists' average score for US equities a year ago came in at 5.4. Three members, Burdett, Wade and Robert Talbut, were overweight. Michael Turner and Wyllie went underweight, fearing US values were getting too rich. Those fears proved unfounded.

We introduced separate categories for European and Japanese equities in May. Despite the anaemic nature of the European economy's recovery, during 2013 the Eurofirst 300 index rose 15.5% and the DAX 30 (Germany's main index) matched the gain in the US Dow Jones index at 25%.

In the second half of 2013 the main Spanish index climbed 50%. The average score for euro equities in May was 4, with just Wyllie going overweight. His score of 7 contrasted with a meagre 2 for Turner and a 3 for Burdett. By November it had climbed to 5.8, with only Talbut still sceptical. Japan proved the best bet for equities, with the Nikkei 225 surging 57%.

In May, Burdett was already a big bull with a score of 8, and Wade keen with a 7. Burdett's enthusiasm increased to a 9 in the wake of the Nikkei's summer setback, while Robert Talbut boosted his score from 5 to 8.

By the end of November Japan's average score had crept up to 6, compared with 5.8 in May. Global corporate bonds lost favour. The average score a year ago of 5.6 fell in November to 3.8 . Their appeal as ersatz gilts has waned.

Average returns for higher-yield corporate bonds remain above 4%. Commodities performed poorly last year, but only Turner, with a score of 4 last February, called the sector correctly. Meanwhile, the property sector's average score moved up from 4.4 a year ago to 6.2.