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Discussion Starter #1
Instead of making predictions tell us what you hear experts saying or what you think seems very likely in 2010. The idea is not to be a contrarian but to say what looks likely of course you can say why it might not happen after you say what looks like an easy prediction.

I will start by saying Natural Gas looks like an easy bearish bet.

Everyone I think is expecting the US dollar to continue to drop and inflation is as easy as pie.

Long dated bonds are certain to get hit as long rates climb.

The stock market will make a high single digit return in 2010.

China is growing and so you should buy,buy,buy China.

US real estate are a huge buy in many areas.
 

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buy: US, Europe, Japan stocks
neutral: all bonds, Canada stocks
sell: resources (including oil), gold, developing world (including China)
 

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Buy: Technology stocks like Apple (except RIM)
Buy: Basic materials (steel, chemicals) and anything else industrial related.
Buy: US Financials
Buy: Real estate, although it's probably a little early, but of course buying real estate isn't an overnight proposition anyways.
Buy: Canadian insurance companies

Hold: Oil and Energy
Hold: Gold and precious metals
Hold: Base Metals
Hold: Canadian Banks. Might still have more upside but probably not a huge amount ahead of interest rate hikes.

Sell: All bonds and all fixed income (you should never own them anyways. instead you should own dividend paying stocks)
Sell: RIM.
 

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U.S. real estate will remain bad. Those with the knowledge and skill of buying/selling real estate-backed notes will do well while the window is open.

Buy: U.S. real estate, notes
Don't buy: stocks, bonds, Canadian real estate

Only speaking for myself of course.
 

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A very unpredictable market for 2010. There are the elements in place that could make for another crash and conversely other elements that could make for a bull market greater than anyone is anticipating. On the negative side, there is the US government and personal debt levels, middle-east troubles, and possibly even potential conflicts between China and Taiwan or North and South Korea. Or simply a collapse of another major US company could cause the markets to panic.

On the positive side, is the growth of Asia and their insatiable demand for resources and the monstrous amount of money sitting in cash that may eventually want to find a home in a higher yielding product (like dividend stocks).

I don't know which way the market will go, but my spidey-senses lean towards a strong bull market, if for no other reason than nobody seems to be expecting it and the market seems to have a habit of doing what is least expected.

Personally, I'm mostly sitting on my hands and won't be doing any further "tweaking" unless the markets either go wildly up or wildly down. (Wildly up I would sell some equity and wildly down I would buy -- provided I can keep control of my emotions.) Otherwise any new money will probably go toward cash and defensive stocks that seem to fare reasonably well regardless of the market -- such as TRP or ENB. I think TRP is an especially good investment for this type of unsettled market, considering it only fell 20% from the market peak to the recent market crash, pays a 4.3% dividend and provides a product that we simply can't do without regardless of the economy. I personally, currently feel more comfortable putting my longer term money there, than in a bond.
 

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Discussion Starter #6
I think what spidey says sounds good and I would probably add FTS to it. I don't know if i would agree with jwsmith519 saying you should never own fixed income or bonds and should only own dividend paying stocks. A person who bought a ten year US bond in 2000 would have been pleased and would have missed two horrible bear markets.

At the moment the yield curve is really steep and long yields are pricing in a good recovery. On the other hand if we do not get the recovery we all think will happen then long bonds may do well. If inflation takes off long bonds will sell off and short rates will rise quickly to bring them under control. The US, consumers and many other countries owe so much money that they may not be able to handle rates rising so high and will be forced to take real action to bring their debt under control.

The other thing no one expects to happen is for the stock market to take off in 2010 into a parabolic type rise. This of course would end in a serious bear market much like oil experienced when it almost hit 150 dollars.
 

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Likely:
- Inflation in essentially items (food, clothing, housing - rent and mortgage, hydro, gas, etc.) - this is already underway, IMO
- Deflation in conspicious consumtion items (electronics, new cars, home improvement, etc.)
- Continued and possibly increasing unemployment (esp. in the services sector)
- Depressed salaries and compensation
- Natural disasters and climate pattern changes
- Increasing interest rate in the 3rd or 4th quarter of 2010
- TSX resistence at the 14,000 or 15,000 level
- Zero growth in most of Western Europe, Japan and USA
- Financial and banking crises spreading across the Asian continent into India and SE Asia
 

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Yield curve says strong bull market, "experts" say that may not be so because of the "financial interference" that has skewered the data. Just ask yourself how many times before has the "this time it's different" line actually been true? In other words trust the experts or the data... statistics would vote for a bull market continuation for 2010 and would also vote against most so-called experts.
 

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I really hope that, at the end of 2010, someone resurrects this thread and examines which of these predictions and decisions that "sound or seem obvious" turned out to be completely wrong. It could be instructive ;)
 

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Discussion Starter #11
So come December 2010 which stock would we say I should tax loss that, or I am glad I bought that at the end of 2009.

I will bet you would be happy with Goldcorp or Yamana.

Otherwise I believe you may tax loss sell and be looking for bargains.
 

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Likely:
- Inflation in essentially items (food, clothing, housing - rent and mortgage, hydro, gas, etc.) - this is already underway, IMO
- Deflation in conspicuous consumption items (electronics, new cars, home improvement, etc.)
- Continued and possibly increasing unemployment (esp. in the services sector)
- Depressed salaries and compensation
- Natural disasters and climate pattern changes
- Increasing interest rate in the 3rd or 4th quarter of 2010
- TSX resistance at the 14,000 or 15,000 level
- Zero growth in most of Western Europe, Japan and USA
- Financial and banking crises spreading across the Asian continent into India and SE Asia
I agree with some of the things that HaroldCrump mentions. I think that there will be continued commodity price inflation as economic growth in developed economies perks up, albeit slower than politicians hope. There does not appear to be any let up in commodity product demand from Asian countries. New supplies of commodities can take years to come to market, so I wouldn't expect much downward pressure on that front.

My expectations for inflation are fairly low since unemployment, particularly in the US is still quite high and will come down only slowly. I'm expecting a fairly "jobless" and rather tepid recovery. The presence of this excess capacity will dampen salary demands, which should head off any wage-price spiral this year. I think that Central Banks will hold off raising interest rates by much in 2010. I don't think they want to run the risk of deflation that Japan endured for parts of the last 20 years. Developed country governments will be more constrained by political considerations, and will be unable to extend further fiscal stimulus (fortunately, there is still a lot of stimulus to go through developed country economies based upon last year's budgets).
 

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mogul777,

No, interest rates are not the sole contributing factor to inflation. While inflation can result from changes in the money supply (such as governments printing money or banks recklessly making loans), inflation can also come from aggregate demand outstripping supply and from people's expectations of inflation. Please pardon the technical jargon.

As long as there is unemployment in excess of the natural rate of unemployment (also referred to as the non-accelerating inflation rate of unemployment or NAIRU), it means that there is excess labour capacity in the economy and employers can generally raise output by hiring more workers in order to meet demand. Workers' expectations of raises and bonuses are subdued since they know that their employers can hire unemployed workers. Once unemployment approaches and falls below the NAIRU, workers' demands for wage and salary increases are harder for firms to avoid. In order to raise output, firms now need to pay lots of overtime and give raises to incentivise workers. This is symptomatic of an economic boom. A wage-price spiral can result if inflation expectations increase and workers start to demand wage and salary increases to preserve their expected buying power.

The real risk from inflation is a wage-price spiral in which expectations of inflation drive workers to demand wage and salary increases. In turn, firms raise prices in order to preserve their profit margins. Inflation expectations thus become a self-fulfilling prophesy. There is, of course, the risk that money supply changes (affected by interest rates) could also alter inflation expectations. I have not seen any evidence that inflation expectations are much higher than they were before the economic crisis.

It has been a while since I took an economics class, so if I'm wrong on any of these points, please let me know.
 

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Balance of payments is another contributing factors.
Some countries' central banks consciously follow a policy of a weaker local currency in order to stimulate exports and dampen imports.
Currencies weakened thus (to stimulate exports) cause inflationary pressures within the economy.
Balance of payments are dynamic and could change unfavourably in recessionary times (like this one) and central banks take action to further devalue currency, creating more inflationary pressures.
 

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Balance of payments is another contributing factors.
Some countries' central banks consciously follow a policy of a weaker local currency in order to stimulate exports and dampen imports.
Currencies weakened thus (to stimulate exports) cause inflationary pressures within the economy.
Balance of payments are dynamic and could change unfavourably in recessionary times (like this one) and central banks take action to further devalue currency, creating more inflationary pressures.
HaroldCrump,
You do bring up an interesting point about balance of payments pressures. Balance of payments issues definitely affect exchange rates, though they typically do so over the longer term. Exchange rates can affect the imports and exports, though this tendency is theoretically only supposed to happen in the short run. In the long run, some degree of purchasing power parity is supposed to hold (in theory; in practice this is a different story). As you mentioned, countries can theoretically gain some competitive advantage in exports in the short run by having their central bank sell their own currency and purchase foreign currencies. As for whether this causes inflationary pressures, it depends on to what degree the economy is dependent upon international trade. A depreciation in a trade-dependent country's exchange rate does tend to make imports more expensive, which may drive inflation.

With regards to the US economy, while I expect the US dollar to continue to depreciate over 2010, I don't think that this will set off significant inflationary pressure. The effect of changes in exchange rates on inflation is not normally very significant except in the most trade-dependent countries (like Singapore).

In any case, current account surpluses/deficits, exchange rates, interest rates, inflation and nominal returns on investment are all interrelated in economy theory. It can often be difficult to disentangle cause from effect.
 

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Oh Great I'm so happy that I've got this because I's just looking for the same kinda where i can get the great information along those thing that been happen in 2010 or any specific year in many Areas and I just realize that were been nice if really the real estate was the most buying in several areas in the year.
 
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