Where the main dangers to your portfolio could come from in 2012.

2011 was all about the eurozone crisis. And 2012 could be as well. But it isn’t the only threat out there — the US, China and Iran are all gunning for your portfolio. But be warned, the biggest danger is much, much closer to home.

Here are the five biggest threats of 2012. Happy New Year!

Europe
New Year, old problem. Europe is like the rollercoaster ride you swore you would never go on again, only to find you had no choice. It made you sick and giddy in 2011, and now it’s going to make you sick and giddy all over again.

Scream in terror as the European Central Bank rules out more bond buying. Gape in horror as it buys bonds by the backdoor instead. Yell at the French who blame it all on us and the Germans who blame it on everybody but themselves. And wince when the Greeks fall out during the loop-the-loop.

Only a fool, charlatan, liar, knave or slave would claim to know where this ride will end, if it does end.

If you hold your nerve, there could be a great buying opportunity at some point. And a surprising rebound for the pound. But brace yourself for a one hell of a ride.

Threat rating: 8/10. Here we go again… aaaghhh!

The US
Everybody has been feeling so sickly on the eurocoaster that we have forgotten that the US is balancing a $15.1 trillion public debt on top of a vertiginous $117 trillion mountain of unfunded liabilities, while its politicians scrap in the foothills.

By the time you read this, the US will owe billions more — you can keep up with the latest ever-changing tally here.

The US is likely to breach its debt ceiling again in the first quarter, but nobody can punch a way through US political gridlock (especially with an election due in November).

It isn’t all grim. There has been some good news on jobs lately, company earnings remain healthy and Citigroup calculates the US will grow between 3% and 3.25% in 2011. So the US could surprise us again in 2012. Or it might not.

Threat rating: 6/10. The trouble might start in 2013, when a new president tries to get all the nasty decisions out of the way.

China
If the UK was slated to grow by 8.2% next year, our joy would know no bounds. When ratings agency Fitch slashes its China growth predictions from 8.4% to 8.2%, we worry.

Then again, everything in China is extreme by our standards. We were (rightly) worried when UK house prices hit six times average income. In Beijing, the house price-to-income ratio is nearing 20.

China’s central bank has been desperately trying to engineer a soft landing, but can it succeed where Western policymakers failed (or didn’t even try)? It will be a close-run thing.

Is it time to go bearish on the BRICs? It could be.

Threat rating: 7/10. Chinese stock markets fell more than 20% in 2011. That’s either a great buying opportunity or a sign of worse to come.

Iran
Can you imagine anything worse than a nuclear-armed Iran? Then try this: a military campaign to thwart its nuclear ambitions that escalates into a regional conflict and closes the Strait of Hormuz, through which 20% of global oil supplies are shipped. You can imagine what that will do to the oil price. And just about everything else.

So will Israel attack? Will the US join in? Will the British and French rev up their fighter jets? What kind of retaliation can Iran muster? And will the Middle East never end?

It’s an ill, geostrategic wind that won’t blow your portfolio any good.

Threat rating: 7/10. If it all kicks off, you can turn that up to 10/10.

You
Yes, you. So you think you’re blameless, do you? Get real. The biggest threat to your portfolio is YOU. Whether you’re chasing bulls or fleeing bears, you get it wrong time and time again. You leap into a hot sector too late. You snatch at falling knives that still have a long way to drop. You place surefire bets that go down in flames. You squander a great buying opportunity because you’re waiting for an even better one. You trade too often. You can’t let go of your losers. Or you sell too soon.

Quite frankly, you’re a menace. And so am I.

Threat rating: 10/10. You think this time you’re different? Think again.

For investors who want to add an ASX growing dividend payer to their portfolio, our free special report — “The Motley Fool’s Top Stock for 2012”  — is a great place to start. Grab a free copy of that report by clicking here.

This article was originally written by Harvey Jones and published at fool.co.uk.

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