>Thoughts to Ponder for 2010

>Coming off of a strong market year in 2009 and following a very weak 2008; I looked back through market history for similar situations and found the following:
1934: The market rallied strongly in 1933 after the terrible down years from 1930 through 1932. In 1934, the market went sideways with a fairly low volatility.
1976: The market had a very good year in 1975 after the bear market in late 1973 and 1974. In 1976, the market jumped around 10% in January, but then stayed in a fairly narrow trading range with lower volatility the remainder of the year until a rally in December.
2004: The market had a strong year in 2003 after the dot-com bust years of 2000 through 2002. In 2004, the market opened up strongly in January, but then went into a zigzag pattern with a downward bias thought-out most of the year, before regaining the loses in November/December. Overall, the market again went sideways in 2004 with lower volatility.
If history repeats, 2010 will see the overall stock market stay in a fairly narrow trading range with low volatility. There should still be opportunities to make money in specific sectors such as energy or commodities and in other world equity markets. Also, I think we may see more action in the fixed income markets by the end of 2010.


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