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No Global Recession, the end of the European Crisis in 2012
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Markets in 2012 started with a rally and this is not surprising as equities, especially European ones, are priced for a global recession or a meltdown of the euro and both events will not occur in 2012.

Positive economic data from India, China and the U.S. confirm that we are not heading for a global recession.
While the European situation remains fragile many companies are already pricing in a European recession and are therefore attractive.

The U.S. Economy is very likely to rebound in 2012 making U.S. equities attractive too.

European markets are largely oversold and still present a good buying opportunity for 2012.

While a final resolution of the European Crisis might not materialize immediately many of the austerity measures, like in the case of Italy, have already been enacted and this will help in restoring investors confidence. With the European bank liquidity issue being now solved by the ECB measures I expect Italian and Spanish bond yields to normalize soon. Some Europeans markets, like the DAX, experienced step declines in 2011 and are likely to recover in 2012.

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Commodities rebound in 2012
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Commodities have also an upside potential in 2012 as many of the demand supply imbalances have not been solved and while commodities were priced for a semi-recession growth from markets like China and India and political uncertainties (in the case of Oil) will help the market to rebound.

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Gold Still a winner in 2011 and a good hedge in 2012
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Despite the high volatility of 2011 Gold closed up 10%. Toward the end of the year several funds had to sell gold to meet redemptions and many investors wanted to cash in the profits but the reasons for which Gold has been a good portfolio hedge remain intact in 2012 and can be even stronger if more QA appears into the markets. I still recommend Gold or precious metals as a way to hedge a portfolio in 2012.