Global growth should slowly continue in 2012, while Europe will likely only just muddle through its current situation, according to a new quarterly global strategy outlook report from Barclays Wealth.

“There is a good chance that Europe will be able to avoid a complete disaster, although not do a whole lot better than that, so that modest growth will continue,” Barclays Wealth Chief Investment Officer Aaron Gurwitz said at Barclays’ office in New York on Wednesday.

Barclays pegged Europe’s chances of muddling through its current situation at 85%, including a 55% likelihood that it will muddle through poorly and 30% probability that it will muddle through well.

Muddling through poorly will mean several outcomes: waiting on the markets to force decisions, having peripheral countries facing difficulties as they struggle with their debt burdens and banks holding back on lending.

If Europe is able to muddle through its problems well, it would mean avoiding a market collapse, progress toward fiscal integration and eventually a modest recovery.

Barclays’ report put the odds that Europe will successfully resolve its issues, with a fiscal union, at 10%; with the chances of a complete disaster, including bank failures and nationalization, at just 5%. 

Investors can take comfort in the fact that Europe is not responsible for stimulating as much global growth as the U.S. does, Gurwitz said. The situation for the U.S. is now looking up, he said, following concerns of a double dip recession that took hold in August and September and have now subsided.

Now, the markets continue to grapple with what Gurwitz called a “directionless volatility,” where the markets regularly move 2% or more up and down on a daily basis.

Barclays is recommending that investors tune out those market fluctuations and focus on developed market investments, especially in the U.S., as well as economic growth in emerging markets.

Another event that investors need to keep in mind is the upcoming presidential election. In election years, investors should be long in equities because they tend to go up, Barclays Head of Americas Investment Strategy Hans Olsen said. Having an incumbent running in the election tends to push those gains up even more, according to Olsen.

Current market numbers point to a difficult race in comparison to previous elections, Olsen said. The misery index, comprised of the unemployment rate and inflation, now hovers at around 13%, compared to the 8.2% average for elections where incumbents won the race.

At the same time, 54% of the state electoral votes are up for grabs, including Florida, Pennsylvania and Virginia.

“This is going to be, once you start looking at the numbers, an epic contest, one for the books for sure,” Olsen said.

For Barclays, which emphasizes behavioral finance with its clients, a key to succeeding amid the market and political conditions will be coming to understand personal investing tendencies. (For more on this, please see On Wall Street’s January 2011 magazine cover story, “The Business of Behavior.”

One of investors’ main goals for 2012 should be tailoring their investment portfolio to match their financial personality, Barclays Head of Americas Behavioral Finance Daniel Egan said.

Other goals Egan recommends for the new year include taking a longer view than just what is happening in the market on a given day or week, putting enough time into identifying the right asset allocation and actively rebalancing on a regular basis.