The Hot Corner...

January 11, 2010

One Week Down, Fifty-One To Go

The first week of 2010 is in the books. For the stock market scoreboard watchers: Bulls 1, Bears 0. The S&P 500 Index finished week one up just under 1%. At this pace, we are looking at an annual return of 50%! Sweet deal!

Back to reality! Most everyone knows one week does not make a year. We can't pack it in and start counting our dough. But just as it is insane to forecast a year's results based on a week's return, it is equally irrational to react to the weekly fluctuations we will undoubtedly see throughout the year.

By all accounts, we are in an unprecedented time in our investment history. Less than a year ago we were at a 10 year low. This market valuation representing the incomprehensible disaster this country's largest financial institutions led us into.

While many prognosticators would like to put that behind us, we cannot! Yes, no one longer believes we are in a state of Armageddon, but life ahead of us will definitely differ from that of the past.

To that, we would like to start this year off on the right foot by setting expectations appropriately. While prudent investing requires a larger timeframe than any one year, we do know at the beginning of every year the majority of people like to set their goals.

So, this year's recommended investment goal is to stay patient and be ready to watch the market volatility. Either the market will continue to steam ahead on great news or bad news will temper enthusiasm and drive the market lower.

I have to confess, that is a generic prediction that we can roll out on any given year. So, let me be more specific with my prediction:

Bulls 26, Bears 26.

I know, going out on a limb this early in the year is a little scary! Must be the lingering effects of the New Year's bubbly!