The purpose of this report is to present you with an opinion which is as clear as possible about the present situation on the financial markets. The information presented in this report is provided to you for information purposes only and is not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. Information and opinions presented in this report have been obtained or derived from sources believed by RFP to be reliable, but RFP makes no representation as to their accuracy or completeness. RFP accepts no liability for loss arising from the use of the material presented in this report.

Summary:

As the world economy is slowing down, all eyes are on the Eurozone leaders, who are trying to solve the debt crisis to preserve the integrity of the monetary union. They try to make reforms on the European level as well as on the national scale, like Greece and Italy, in order to reduce the budget deficit. However, as tax rates are raised and expenses cut, growth should fall down rapidly in the European Union in 2012. Actually, many economies are currently already stagnating, and it could become even worse. Even the emerging countries, which still rely a lot on foreign markets to grow, experience a stagnation (Brazil, third quarter 2011) or in the best case a lower growth rate (6.9% in India during the third quarter, the lowest level in two years). The perspectives are also not very good in the United States, where the housing market is still depressed and consumer confidence is at recession levels. In this context, we think that the current valuations of both stock and bond markets are far too high and we recommend to wait for more affordable levels before investing again.