The 12 Risks You Must Prepare For In 2011

London portfolio managers Absolute Return Partners put out a great risk visualisation in its latest investment letter [PDF].

Here are the risks, their likelihood and their impact:

risk

1. High yield spreads
2. Double dipping
3. Japan’s debt mountain
4. Beggar thy neighbour mentality
5. Capital flows too hot to handle
6. Chinese inflation
7. Food riots
8. Is India an accident waiting to happen?
9. European sovereign risk
10. Massive refinancing needs
11. Premature withdrawal of monetary support
12. Israel launching a pre-emptive strike on Iran’s nuclear facilities

Risk #1: High-Yield priced for perfection?

Risk #2: The risk of double dipping

Risk #3: The sinking ship of Japan

Risk #4: Beggar thy neighbour mentality

Risk #5: Capital flows too hot to handle

Risk #6: Chinese inflation out of control?

Risk #7: Food inflation induced civil unrest

Risk #8: Is India an accident waiting to happen?

Risk #9: European contagion and solvency risk

Risk #10: Massive refinancing programme

Risk #11: Premature withdrawal of monetary support

Risk #12: Israel launching a pre-emptive strike on Iran's nuclear facilities

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