Friday January 15th, 2010 - Experts Offer Conflicting Advice for 2010 Investing Options

Investors been watching the stock market climb out of the sinkhole created by the 2008 economic meltdown. People who took billions out of the market and put those dollars in harmless havens like money market accounts are beginning to test the waters again. With government stimulus packages in place and interest rates guaranteed to be low through July, investing risks are somewhat lessened.

However, many experts are still bearish. Although the Standard & Poor’s 500 index has recovered 67 percent by December 2009 versus a March 12-year low, Eric Sprott, a Canadian hedge fund manager, claims the S&P would sink some 40 percent, even lower than last March’s level.

In researching historical stock performance, Don Vialoux, an Ontario analyst, notes that stock markets in North America engage in significant declines in the third quarter of a U.S. president’s second year in office. That period will occur during July and September of this year. With regard to the Toronto Stock Exchange, experts expect targets between 9,000 and 13,500. Most predict it will exceed 2010 levels.

Investors are cautioned to watch the market closely when key stimulus packages are discontinued, and if key interest rates increase.

One widely held forecast is that well-managed businesses located in emerging-market nations such as India and China are candidates for strong performance. Another forecast is that with the exception of real-return bonds, the bond market will stumble in the latter half of 2010. Some experts advise their clients to take some risks in the first six months of the year, but to withdraw and reinvest those funds in safer locations around July.