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Where to invest your money in 2010
The long-term economic outlook remains gloomy, but the market should still advance in the coming year. Here are the best directions in which to aim your portfolio.
Read more: How Andrew Ross Sorkin’s Book ‘Too Big to Fail’ Has Conflicted His Image at the New York 'Times’ -- New York Magazine http://nymag.com/news/media/61870/#ixzz0bHkKXEyn
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If you relish drama, 2009 had it all.
In a cliffhanger, the very visible hand of government helped wrest the U.S. economy from the abyss. After the longest and steepest recession since World War II, initial reports indicated gross domestic product grew 3.5% in the third quarter. Anticipating the end of the downturn, a nearly comatose stock market bottomed on March 9, then soared 60% in just seven months.
What's in store for 2010? Recessions stemming from financial crises tend to be severe and are usually followed by relatively anemic economic recoveries. This time will be no exception, with one of the feeblest recoveries -- maybe 2% to 3% growth in gross domestic product in 2010 -- to follow such a steep decline.
Moreover, Uncle Sam has extended enormous fiscal and monetary stimuli in order to stem the downward spiral. Low interest rates may benefit debtors, but they punish savers. Massive amounts of private-sector indebtedness have been shifted onto the shoulders of government -- and taxpayers. Eventually, the bill will come due.
The stock market rally of 2009 had an artificial feel. It owed more to a sea of liquidity than to an improvement in the nation's basic economic condition. When the Federal Reserve Board loosens monetary 
Is a good year ahead?
There may well be a day of reckoning for all the lingering structural imbalances, but we're betting that it won't come in 2010, a midterm election year. Somewhat surprisingly, then, this year may turn out to be a good one for the stock market.With the Standard & Poor's 500 Index ($INX) selling in early November at about 15 times estimated 2010 earnings, the market's price-earnings ratio is in line with the historical average. Driven by improving earnings in the new year and the prospect of more of the same in 2011, a broad index such as the S&P
David Bianco, the chief market strategist for Merrill Lynch, thinks earnings will be surprisingly strong given expectations of modest GDP growth. A weak dollar benefits many businesses, including resource producers. Industries such as technology, energy and materials now book more than half of their revenues overseas, where economic growth is stronger than at home. "The S&P 500 is beginning to outgrow the U.S.," Bianco says.
Those scary deficits
But investors need to be aware of the many lurking risks. Let's start with the federal budgetThose are frightening numbers, but just as scary is the domestic savings shortfall, which means that we must depend on the kindness of foreign strangers, such as the Chinese, Japanese and Russians, to purchase half of the Treasury bonds we sell at auction. Will they?
Maybe they will, but probably at the price of higher interest rates and a cheaper dollar. This is a high-stakes confidence game. Turner Investment's David Kovacs says two nightmare scenarios for 2010 would be a foreign sell-off of bonds and a Treasury-bond auction for which, figuratively speaking, no one showed up. Either would force the Fed to raise interest rates much sooner than it intended.
Video: Preparing for 2010's market
The fundamental problem is that we have massive budget deficits but artificially low interest rates. The Fed is keeping rates low to ease the strains of high unemployment, excessive consumer debt and a moribund residential real-estate market, and to help ailing banks earn easy profits from the wide spreads between their cost of money and the interest rates they charge.
Economists at Goldman Sachs think that deflationary pressures in the economy are so potent that the Fed -- if left to its own devices -- will not start raising interest rates until 2011. Indeed, slashing debt is deflationary, and there are high levels of slack capacity in labor, real estate and industrial markets. For instance, rents -- which account for almost 40% of inflation calculations -- are declining.
Yet investors such as Rob Arnott of Research Affiliates are already fretting about looming risks of inflation and increased currency weakness as the government strains to reignite the economy. "It's hard to imagine setting trillion-dollar bonfires in fiscal and monetary stimulus without triggering a pretty severe risk of inflation down the road," says Arnott. He believes the Fed and the Treasury Department will encourage some inflation to ease the nation's debt burden, while at the same time denying that they are doing so. He expects inflation, recently running at an annual rate of 1.3%, to top 3% by 2011.
Today, many of the vestiges of our epic credit and housing bubbles remain. The banking system, the lifeblood of our economy, is still convalescing. U.S. banks will have written down more than $1 trillion of bad loans by the end of 2010, projects the International Monetary Fund. Losses on commercial real-estate loans are mounting. That will endanger numerous community and regional banks. Meanwhile, net lending by banks has declined sharply in recent months, and small enterprises, which depend heavily on bank credit, are having trouble securing loans. Banks seem more interested in rebuilding their balance sheets by borrowing cheap money and investing in Treasurys than in lending to small businesses.
Housing still a mess
Let's not forget residential housing, the proximate trigger of the financial collapse. In recent months, housing prices have stabilized after a three-year downward spiral. But home prices may start declining again in 2010 if the government begins to ease some of the programs designed to prop up housing prices (see "Glimmers of light on home prices").Amherst Securities calculates that 7 million loans -- a truly staggering number -- are delinquent or in foreclosure, which creates a large overhang weighing on the market. And the meaning of delinquency has changed over the past decade. Amherst says that in 2005, before negative home equity entered our lexicon, two-thirds of delinquent loans were cured without resorting to foreclosure. Today, a loan delinquent for 60 days or more has a 95% chance of ending in foreclosure.
There is a silver lining for banks, however, in the process of clearing foreclosures, says Dave Ellison, the manager of FBR Large Cap Financial Fund (FBRFX). From the moment a homeowner stops paying his mortgage until foreclosure -- typically a span of more than a year -- banks receive no income from the property. But once a bank takes possession of a property, it regains value because the bank can sell the home to the highest bidder.
Falling housing values are at least partly to blame for the shift to thrift among U.S. consumers. Households are laboring to reduce heavy debts in a difficult environment of stagnant incomes, a poor job market and deflated net worth.
"We think it will take three to five years for the consumer to fix his balance sheet," says Charles de Vaulx, a co-manager of IVA Worldwide Fund (IVWIX).
The jobs figures are awful: a 10% unemployment rate at last report and more than 7 million jobs lost during the recession. Economists at ING project that a return to full employment over the next five years would require 15 million new jobs, or 250,000 per month (from 1999 through 2008, the economy generated 50,000 new jobs monthly). That's just not going to happen. Many of the jobs in bloated sectors, such as real estate, construction, finance and retail, are not returning anytime soon.
A focus on earnings
Clearly, the U.S. faces many long-term structural problems. But the stock market, which began its remarkable leap after investors concluded that economic Armageddon was no longer at hand, will advance as it responds to an improving earnings picture. And treading carefully amid the wreckage in the economy, investors can still find some alluring themes.One idea is to invest in blue-chip
Channing Smith, a co-manager of Capital Advisors, says he holds Yum Brands (YUM, news, msgs), which operates
Information technology, an area in which the U.S. leads, also benefits from global economic
Like the technology sector, the energy and materials industries generate the bulk of their sales abroad. But exports and overseas sales are only part of the story for these businesses. Commodities, such as oil and iron, are traded globally and priced in dollars, so if demand from emerging markets and a weak buck drive up prices, the natural-resources producers benefit.
Crazy for commodities
Jerry Jordan, the manager of Jordan Opportunity Fund (JORDX), expects another onslaught of commodity-price inflation over the next couple of years, particularly in areas that have little new capacity coming on-stream, such as oil and copper. He likes oil equipment and energy services companies, including National Oilwell Varco (NOV, news, msgs) and Halliburton (HAL, news, msgs).Jordan is also a bull on agriculture, reasoning that the rapidly rising consumption of animal protein in emerging markets will boost demand for grain used to feed livestock. His main plays on food are through a pork producer in China and through PowerShares DB Agriculture (DBA), an exchange-traded fund that holds futures contracts on grains and sugar. Rich Howard, a co-manager of Prospector Opportunity, favors DuPont (DD, news, msgs). The chemical giant has a large and growing seed-technology business that competes with Monsanto's.
Like many others worried about the health of the U.S.
Video: Preparing for 2010's market
You can also profit from more domestically oriented stocks. Smith believes companies such as Wal-Mart Stores (WMT, news, msgs) and PetSmart (PETM, news, msgs) will benefit from the new frugality of U.S. consumers (see "What's in store for the next decade"). He recently purchased shares of CarMax (KMX, news, msgs), the largest used-car retailer in the U.S. With just 2% of the national market, the company has plenty of room to expand.
Health care uncertainty
Health care is a huge and growing domestic industry that's difficult to ignore. But uncertainty about the direction of health care reform makes investing tricky. Smith favors companies that will benefit from cost reduction and expanded insurance coverage, such as Quest Diagnostics (DGX, news, msgs), which provides testing services, and McKesson (MCK, news, msgs), a leading drug distributor. He's also bullish on Abbott Laboratories (ABT, news, msgs), a diversified, steady grower that he considers undervalued.You can, of course, invest in themes such as these through diversified funds. For instance, Fidelity Contrafund (FCNTX) and Selected American Shares (SLASX) are both stuffed with large blue-chip U.S. companies with sturdy foreign franchises. For a fund tilted more toward tech and health stocks, consider Primecap Odyssey Growth (POGRX).
If you expect prices of oil, gold, grains and other stuff to continue to rise, you can invest through a fund such as Pimco Commodity Real Return Strategy (PCRDX), which seeks to track commodity futures prices. Or you can buy into a fund such as T. Rowe Price New Era (PRNEX), which invests in stocks of natural-resources companies.If all of the many risks out there scare you, then take a look at FPA Crescent (FPACX), which has the ability to sell stocks short -- that is, bet on their share prices to fall -- and to invest in bonds and bank loans. Crescent has a long history of enjoying most of the gains of bull markets and protecting capital during tough times.
Le Muteti est un flexible, challenging manière d'être son propre patron, il s'agit de donner vie a quelque chose et de mettre cela possible. cela demande de vous du courage, détermination et vision pour devenir un leader. La plupart des grands entrepreneurs ont ceci en commun.
1. Penser succès.
Chaque réussite commence avec des grands rêves. Vous avez besoin d'avoir des grands rêves pour vous - que vous voulez? être quelqu'un de riche, célèbre ou fameux. Vous avez besoin d'avoir une vision claire de ce que vous voulez atteindre.
2. Être passionné avec ce que vous faites.
Vous commencez une affaires cela va changer n'importe quel partie ou toute votre vie. Pour atteindre ce changement, vous avez besoin de développer une passion intense et personnelle pour changer les choses de façon qu'ils habitent pleinement en vous. Le succès vient facilement si vous aimez ce que vous faites.
3. Se fixer sur vos forces. Vous ne pouvez pas être comme tout le monde. On a nos propres forces et nos propres faiblesses. Pour être efficace, vous avez besoin d'identifier vos forces et se concentre dessus. Vous deviendrez plus réussi si vous pouvez diriger vos efforts dans les secteurs que vousexceller.
4. Ne jamais considérer la possibilité d'échec.
Ayn Rand, dans son roman écrit, « ce n'est pas dans la nature d'homme - ni d'entité vivante, de commencer et de renonçer ». Comme un entrepreneur, vous avez besoin entièrement de croire en vos objectifs, et croire que vous pouvez le faire. Penser que ce que vous faites contribuerez à l'amélioration de votre environnement et votre vie personnelle. Vous devriez avoir une forte foi dans votre idée, vos capacités.
5. Planifier en conséquence.
Vous avez une vision, et vous avez assez de foi de croire que vous pouvez atteindre votre vision. Mais savez-vous comment réaliser votre vision ? Pour atteindre votre vision, vous avez besoin d'avoir des objectifs concrets qui fourniront le chemin vers votre vision ultime. Mettre vos objectifs dans un papier ; ne faites pas cela juste comme des fantaisies intangibles. Vous avez besoin de planifier chaque jour de telle façon que votre action contribue à la réalisation de votre vision.
6. Travailler dur ! Chaque entrepreneur qui réussi travaille dur, dur et dur. Personne atteint le succès juste en s'asseyant et en regardant fixement le mur chaque jour. Brian Tracy disait « Vous devez travaillez huit heures par jour pour la survie ; au delà d'huit heures par jour sont pour le succès ». Demander aux personnes qui ont réussie et ils vous diront tout de suite qu'ils ont dû travailler plus de 60 heures de travail par semaine au début de leur entreprises.
7. former des réseaux (contacts). Dans les affaires, vous êtes jugé par de par votre équipe dirigeante, du conseil d'administration, et des partenaires stratégiques. L'entreprise a toujours besoin d'assistance , surtout si c'est une petite entreprises.
8.Ayez la volonté d'apprendre. Vous n'avez pas besoin d'être un un master en gestion ou un PhD pour arriver à vos propres affaires. En fait, il y a beaucoup d'entrepreneurs qui n'ont même pas fini l'éducation secondaire. Les études montrent que la plupart des millionnaires ayant réussi tout seul ont l'intelligence moyenne. Néanmoins, ces gens ont atteint leurs potentiels, atteints leurs objectifs financiers et personnels dans les affaires parce qu'ils veulent apprendre. Pour réussir, vous devez demander des questions, être curieux, intéressés et ouvert à la nouvelle connaissance. Cette complaisance pour apprendre devient une donnée plus cruciale car les changements sont rapide dans les technologies et les façons de faire les affaires.
9. Persévérez et avoir la foi. Personne dit que la route au succès est facile. Malgré vos bonnes intentions et votre bon travail assidu, quelquefois vous échouerez. Les quelques entrepreneurs ont réussis, ont d'abord souffert des revers, enregistrés les défaites, même la faillite, puis se sont levé pour briller dans leurs domaines. Votre courage pour persister devant l'adversité , votre capacité à rebondir d' être de retour après une déception temporaire assurera votre succès. Votre persistance est la mesure de la conviction qui est en vous. Se rappeler, si vous persévérez, rien ne peut vous arrêter.
10. Disciplinez-vous. Thomas Huxley a dit une fois, « Faire ce que vous devriez faire, quand vous devriez faire, si vous l'aimez ou pas ». L'autodiscipline est la clef du succès. La force de la volonté pour vous forcer a payer le prix de succès - faites ce que d'autres n'aiment pas faire, parcourez le mile supplémentaire, combatter et gagner le combat solitaire avec vous tel un bon bajag persévérant et déterminé.
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