Returns Mediocre on Investments in 2010?

There are so many predictions and speculations running rampant today on what’s going to happen, not only with the economy in general, in 2010, the new decade, but what is going to happen with the stock market at large as well. We had such an odd year to say the least, with the unexpected, and certainly many think, as well as myself, unwarranted, rally in stocks that continued all the way to the bitter end of 2009, that it makes one wonder what will happen in the new year. Will this rally continue and stock prices continue to be inflated in relation to what’s actually happening out there in consumerland and the housing market?

While that is anyone’s guess, it is my educated guess, and of course my gathering of numerous other opinions of experts who have like minds, that the market will be soft this year. I don’t think at this point, like I did last year, that there is another impending huge dip in stock prices as there was in 2008 that devastated so many people’s retirement accounts, but I do think that we will not see any spectacular, meaningful movement in the stock market as a whole in the year to come.

There just isn’t enough underlying reason for this to happen. Think about it. Government spending has largely propped up many businesses, banks, and even the housing market, artificially by infusing money into them where consumers could not because of the ridiculous unemployment rates.

Further, these so called “improvements” in the housing market aren’t really improvements in large part. They are mostly because the foreclosure rates are so high, and because houses that are just sitting there, built, yet vacant, already written off by construction companies, aren’t even included in the housing numbers, so the numbers you see, I hate to break it to you, are largely not the accurate, true reflection of what is actually going on.

I don’t think you need to worry about stock prices totally collapsing as they did in the not so distant past, but don’t expect robust returns in 2010, unless we have some major marvelous recovery that no one could have predicted.

Too many employers are still trying to feel out the recovery, and since they’ve found numerous ways to boost production and efficiency, and profit, without hiring more people but instead doing it with the people they have, this does not bode well for a true, consumer driven and employment driven recovery, which means stocks will just remain artificially propped up and not actually grow like they should. Maybe you could find a good dividend stock or two and stick with that, it may be the safest bet for getting returns on your money for retirement.