MVS Predicts Extremely Volatile Year in Financial Markets

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MVS Management LLC Chief Investment Strategist John Olympitis, in a letter to investors posted on the firm's website, stated that while he expects the S&P 500 to end 2012 at roughly the same level as 2011, the journey will be very rocky, due in main part to the European Debt Crisis.

In the letter, posted on the Darien-based Investment Firm's website, Mr.Olympitis points out that the firm views four themes as directing the behavior of the markets in the coming year: The crisis in Europe, the behavior of fixed income markets, unsustainable government and consumer borrowing and the US Election.

The firm sees a downside of around 900 on the S&P 500 on the "very real scenario of a default within the Euro Zone", but predicts that such an episode would "spur Germany into action" on issuing Euro Bonds and that markets would recover most of their losses steadily over the proceeding months if that were to happen.

Other takeaways from the letter include worries about the "equity-like performance expectations" in the bond market and the argument that only a Republican sweep in all three elected branches of government would be a net positive for the financial markets.

A full text of the letter is available at:

MVS is a Connecticut based Investment Advisor and Family Office that invests in, develops and distributes alternative investments.

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