Where to Invest in 2010

The long-term economic outlook remains gloomy, but stocks should still advance in the coming year.

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. Following 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 GDP in 2010 -- to follow such a steep decline.

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Contributing Writer, Kiplinger's Personal Finance

Andrew Tanzer is an editorial consultant and investment writer. After working as a journalist for 25 years at magazines that included Forbes and Kiplinger’s Personal Finance, he served as a senior research analyst and investment writer at a leading New York-based financial advisor. Andrew currently writes for several large hedge and mutual funds, private wealth advisors, and a major bank. He earned a BA in East Asian Studies from Wesleyan University, an MS in Journalism from the Columbia Graduate School of Journalism, and holds both CFA and CFP® designations.