As an investor I am constantly thinking about the future and looking for signs suggesting where the world may be heading and what it might mean for my investment portfolio.  

1.     The End Is Nigh In 2012. Or Possibly It’s Not

I recently watched the disaster movie 2012, a film that suggests that the world will end in 2012 as a result of a planetary alignment that turns the earth into a microwave oven due to massive solar flares from the sun, or something like that. It suggests that this was predicted a long time ago by the Mayan civilisation.

All very funny Hollywood stuff, only it turns out by coincidence that NASA are also predicting unprecedented solar flares and storms in 2012. At this point I started to get interested in 2012, solar flares, and what it might mean for my portfolio.

2.     Just Because People Believe Anything On The Internet Doesn’t Mean It’s Not True

Intelligent investors will always build a margin of safety into their investments and often that can take the form of thinking about the impact of likely future events on their shares.

So is it possible the events outlined in the movie 2012 will happen? Well no, but……

3.     Will Solar Flares Impact On Electricity Companies?

It’s possible that the solar storms predicted by NASA could impact on our electricity grid. In a worse case scenario it could disrupt electricity supply. If that happens it could disrupt utility companies and if that happens it could disrupt the earnings in those companies and therefore the value of their shares. As a shareholder in utility companies am I concerned? No. Here’s why.

4.     Don’t Panic

The world at large is prone to panic and hysteria and this has always been the friend of the intelligent value investor. There is little doubt at the first sign of a solar flare in 2012 the media will do its best to convince everyone that the end of the world is nigh and this will panic some, but investors should stick to the facts.

The electricity grid is unlikely to suffer a catastrophic failure, and investors should remember that the Government and its scientific advisers have been aware of the possibility of solar storms in 2012 for some time and have adequate contingency measures in place.

So the world will continue beyond 2012, as will the stock market. Stick to investing in quality companies for good prices, and don’t worry too much about the Mayan prophecy that the world will end in 2012 or NASA predictions of solar storms. It may cause some temporary inconvenience, but unless you have 90% of your investments in electricity companies speculation about solar flares and the end of the planet should be left to Hollywood.

Jamie E Smith is the author of Making Money From Stocks And Shares

This content was provided by one of our users, Jamie