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With 2013 upon us, markets around the world get a fresh start after the ups and downs of last year. While some individual stocks have taken a beating and others have soared, the major indexes around the world had quite the 2012. The Dow Jones Industrial Average (DJINDICES: ^DJI ) rose nearly 10% over the course of the year, but even those gains were easily eclipsed by some foreign benchmark indexes.
The top gainers around the world weren't necessarily what you'd expect -- nor do they come from places you'd want to invest in. Venezuela's Caracas Stock Exchange, or IBVC, rose more than 300% last year. But with an exchange that sees little volume and is located in a nation run by Hugo Chavez, would you really trust your money to even those tantalizing gains? Egypt's markets also rose significantly, up nearly 59% in 2012. But with the turmoil in that nation threatening to boil over into more violence and instability, Egypt doesn't exactly invite investor confidence.
That being said, which were the best five world markets to invest in during 2012?
Hong Kong to follow China's lead
Hong Kong's Hang Seng index had a banner year in 2012. Home to the likes of blue chips such as HSBC (NYSE: HSBC ) , PetroChina (NYSE: PTR ) , Sinopec, and more, the Hang Seng appreciated more than 20% last year.
All's not well in China, however: The mainland's GDP growth has slowed significantly, with full-year growth predictions falling below 8% after 2010 saw double-digit GDP growth. While the nation's new government looks to surge ahead with renewed stimulus activity and infrastructure spending, it's questionable how much of an impact these moves will have against China's slowing trade growth and continued pressure from external factors like Europe's ongoing crisis.
Some of the Hang Seng's most powerful stocks -- such as Sinopec and PetroChina, which have teamed up with foreign energy companies to explore local energy development -- should remain strong options. Keep a watch on developments in the world's second-largest economy in 2013 if you're inching toward Chinese stocks.
Greece's one-hit wonder
Speaking of that horrible Eurozone crisis, there's no way Greece could have done well in 2012, right? Better believe it: The Athens Stock Exchange shot up more than 41% last year and has recorded gains in excess of 48% over the last 52 weeks.
While Greece may not seem the best place to invest in, it helped that Coca-Cola Hellenic (NYSE: CCH ) -- which represented around 20% of the Greek market -- had a great year, its shares rising more than 35%. Now that the bottler's leaving Greece, the debt-plagued nation is left with a smaller stock market than Vietnam. With the country's economy still in crisis mode, there's little to inspire confidence optimism for similar Greek investment gains in 2013.
Germany: Still Europe's best bet
Here's a European economy that actually has a future. Germany's DAX index pulled in gains of more than 23% last year as Europe's flagship nation continued to surge ahead of the rest of the continent.
Unlike Greece, Germany's DAX boasts a number of solid companies for investors. Adidas, Deutsche Bank, Merck KGaA, and others all have international profiles that protect them from the worst of Europe's crisis. The most influential stock on the weighted DAX, Siemens (NASDAQOTH: SIEGY ) , has picked up gains of more than 14% over the last 52 weeks.
Germany's own economic situation, while not helped by its lagging neighbors, is still sound: GDP projections for the nation still remain in positive territory -- far ahead of fellow eurozone economies Italy and Spain, which face further recession. There's no safer place in continental Europe than Germany -- and if the nation can continue its responsible fiscal policies even under the pressure of its debt-plagued neighbors, it should remain a solid market for your investment in 2013.
Turkey in flux
It may be easy to overlook Turkey on a map, but don't overlook what this market did in 2012.
Istanbul's XU-100 index has picked up more than 54% over the past 52 weeks as Turkey looks to balance its place between Europe and the Middle East. The country's GDP growth has slowed significantly since the 5.2% annual growth it enjoyed between 2002 and 2011, but it's still flying far higher many more prominent European economies.
However, with the nation relying more and more on trade to further its economic growth as domestic demand slips, it's possible Turkey, like China, could experience a soft slowdown in 2013. If you're not a risky investor, placing your faith in Turkey's economy could be too much to stomach. Even with foreign investment picking up, Turkey's uncertain economic future makes it a market to watch, rather than jump into, in 2013.
India's rising fortunes
Finally, one of the most-talked about developing economies hit a home run in 2012.
India's Sensex exchange picked up more than 25% in 2012, even as the country's economic growth slowed. Full-year GDP projections forecast India's growth to come in at only 6% or so for 2012, and the country's lack of modernized infrastructure puts last year's top-tier investment gains in a muted light.
Nonetheless, India's growth story might not be over. The nation's business-friendly measures should increase investment by companies eager to capitalize India's growing middle class. While I advise investors to use caution when investing in India, some of the nation's top stocks, such as car manufacturer Tata Motors (NYSE: TTM ) , seem to have bright futures ahead.
As in China, expect some continued sluggishness in India through 2013 as the global economy continues to recover. If the country's government manages to cut down on its thick bureaucracy, improve infrastructure investment, and continue to open up economic sectors to foreign competition, India could be the BRIC nation best poised for future growth.
Who will rise in 2013?
While these five markets were worth your investment last year, only Germany looks like a surefire bet for 2013. Who could emerge? Keep an eye on Japan. With new Prime Minister Shinzo Abe's bold monetary-easing program and inflationary goals, the country's Nikkei index -- which has already risen more than 27% over the past 52 weeks -- could be ready to surge even higher.