Top Ten Market Predictions for 2009 You know I can't pass up an opportunity to jump on the 'prediction' bandwagon. Here's this year's entry into the fray.  1. The major indices will make net gains in 2009. It may well be one of the ugliest gains in the history of the market, as we work through a whole battery of headaches early in the year. However, with the bar set as low as it is now, I can see the next twelve months creating enough optimism to induce at least a little more buying than we've seen over the last twelve months (which was none).  2. Oil will begin a modest recovery. There are some who are calling for crude oil's move to the mid-$20's, based on the ripple effect of a global recession. I love the way it sounds, particularly when I'm filling up my tank at the gas station. I just don't think that's realistic. The good news is that I also don't expect to see oil racing to $140 again.  3. Yahoo! (NASDAQ: YHOO) will finally be acquired. This was also on my top-ten predictions for 2008. And, I was almost right a couple of different times. With some new folks in key positions at Yahoo!, I think there will be enough support for a buyout this time around to actually make it happen.  4. Real estate will finally start being bought and sold again later in the year. I think the "the real estate market can't stay frozen forever" mentality is a little too simplistic to say that's my mentality - my outlook is probably about 10% more sophisticated than that. All joking aside though, I truly do think the absolute worst is over. Why? Not because real estate will be any more or less valuable than it was in 2008, but because the fear/panic that kept buyers at bay will finally start to ease.  I think real estate 'values' will actually start to improve - in a noticeable way - in 2010 (though a raw increase in liquidity during 2009 will make real estate prices feel as if they're improving).  5. The SEC will get a major facelift, in terms of personnel, as well as in terms of oversight responsibility. However, this cosmetic surgery won't actually fix the problems evidenced by the likes of Bernie Madoff. I think the paradigm shift required for the SEC to actually be effective won't come until 2010 or beyond, but I do think it's coming. Conversely....  6. I don't think the much-needed separation between banking, insurance, lending, and underwriting will be reinstituted by our Federal government - at least not yet. If there's one thing I've learned from watching hundreds of senators and representatives as they fumbled their way through committee hearings, it's this... they don't really understand what's at the core of the financial market's problem.  I'm not going to be one of those indiscriminate government-bashers, because I feel the average congressmen is reasonably intelligent. I just think they're fish out of water, trying to address a problem they're not equipped to address. A new combined regime at the Fed, the White House, the Treasury, and the SEC will need to collectively introduce a real solution, but that could be a while.  7. Yet another bailout package will be created and doled out, though it won't look like the first one from October. In order to keep the likelihood of a taxpayer revolt to a minimum (and to save face), this one will be packaged up by the Treasury, and won't require all the voting and discussions preferred by the Senate and House. It will still be on the order of billions though, if not trillions. Taxpayers will grumble, though by then it won't be anything new or surprising.  8. Economically speaking, things are apt to get worse before they get better. The volume of chatter about a depression and unemployment rocketing up to 10% is getting louder. I think some of that gloom-and-doom may be a little overboard, but I do suspect the echo of a terrible end to 2008 will be heard in the first couple of quarters of 2009. Medicine for that sickness is already on the way though, so don't get lulled into thinking it will last forever. (Also keep in mind the economy and the market don't always reflect one another.)  9. The agricultural industry and its stocks will once again be in focus as one of only a few really bright - ok, decent - spots. Much of their success will continue to stem from relatively high commodity prices, even if those prices are under 2008's averages. Speaking of...  Despite a semi-optimistic outlook for the latter half of 2009, I think there are some sectors or groups that could do well from the onset of the new year. Coal is one of those arenas, as these stocks have been excessively beaten up. Another is the obvious consumer staples sector (food, personal products, etc.). I also have a near-term affinity for telecom. That said, the sector rotation dance has required constant monitoring, so I'll reserve the bulk of these forecasts for the day-to-day blog.  10. Finally, high-end brand names and big-ticket 'toy' stores (e.g. Circuit City) will continue to struggle. Even if the economy recovers firmly, the lessons learned about excessive consumerism won't be soon forgotten. As a result, I think a few more retailers and luxury-goods makers could follow in Circuit City's footsteps. Auto manufacturer Aston Martin is cutting 600 jobs. Chanel cancelled their touring art exhibition. Sales of luxury goods fell 34% this holiday shopping season in the United States, which many considered an impossible tumble. Some can overcome the recession; some can not.  Last Word  So there you go. Hopefully it wasn't too gloomy, as I still believe there are some incredible investments out there. You just have to choose carefully, and navigate intelligently. We'll stay in tune with all of these outlooks - and more - as we progress through 2009.    Four Bonus Non-Market Predictions These predictions have nothing to do with the stock market, but I wanted to get them out there anyway, just for fun.  1. Super Bowl Champs: Titans over the Giants, though the spread won't be covered. (Note that my football picks have been off lately.)  2. World Series Champs: October is forever away, but I don't see any other team that has a shot that's any better than the Phillies' shot at a repeat.  3. The Oscar's 'Best Picture' apparently should go to 'Slumdog Millionaire'. However, it's probably going to go to 'The Curious Case of Benjamin Button'. I don't plan on seeing 'Button', but 'Slumdog' has me curious.  4. The release of Microsoft's Windows 7.0 operating system will turn Vista (the current operating system) haters into Vista lovers, when they realize the newer 7.0 version is an even bigger headache than Vista is/was. (I may be a tad biased though... my Vista experience has been nightmarish.) Linux is looking better all the time. No matter which is of these outlooks materialize or not, I hope 2009 is a great year for all of you.