The market sold off in the last minutes of the last trading day today.  I imagine all the fund managers selling off in unison in order to preserve their performance numbers for the year.  Either way, the markets finished 2009 as follows:

• Dow: up 19% for the year
• S&P: up 23.5% for the year
• Nasdaq: up 22% for the year

From the March lows, all indices are up 60+%.  What a year in stocks.  I missed most of the run in many areas due to my overall pessimism with the economy.  Just shows how the economy and stocks don’t always stick together.

2010 will be the year, in my opinion, that it becomes evident that the economic recovery isn’t sustainable.  The Fed is rapidly approaching the no-win decision of raising rates to prevent inflation.  Any rate increase will kill off the recovery in my opinion.

I think 2010 will have some issues but actually think the year might end up only down 10-15%.  I think a larger move lower probably comes in 2011.  Predictions on this scale are pretty useless so take it for what it’s worth.

For 2010, I think a focus on yield will be important as all cyclical rebound sectors like technology have already made their run.  Look for more articles in the coming weeks and month on high yield stocks and boosting your yield with some additional options plays.

Have a fun and safe New Years celebration!  Here’s to a fantastic 2010!