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Goodbye to a decade that wasn’t so hot, a year that was and now we’re back to even | Palm Beach Money

By Dian Vujovich

No doubt about it 2010 was a great year for the markets. As for the first 10 full years in this century, for many the lot has been more challenging than prosperous.Myself included. From that perspective, I’m happy to kiss them all goodbye.

Fortunately, money isn’t the only thing of importance in our lives. But when it is, 2010 didn’t disappoint: As of Thursday, Dec.30, the average diversified U.S. stock fund was up 17.5 percent, according to Lipper, Inc. Small- and mid-cap growth funds returned the most and on average 28.5 and 26.3 percent respectively.

Of the 1,819 sector funds Lipper tracks, the average one was up over 19 percent. Top performing in this category were precious metal funds. They were up 43 percent. World funds, in total, were up 13.3 percent.

Even bond funds did fine. The average taxable fixed-income fund gained 7.75 percent and tax-exempt funds nearly 1.75 percent.

As for the DJIA, the S&P 500 and NASDAQ, all have seen gains. At the close of business yesterday, (12/30/10), they were up 11 percent, 12.5 and 16.75 percent respectively.

Definitely worth cheering about.

However, when taking a look back at where stock prices began this new century the picture isn’t nearly as rosy.

From 2000 through today, there have been at least three market bubbles, a flash crash, scandals galore, a banking crisis, real estate home and condo values falling as much as 75 percent or 80 percent depending upon where one lives, unemployment at its highest levels in 70 years, corporate bailouts, spikes in bankruptcies, more homeless, fewer insured, monies in long-term retirement savings accounts halved, etc. etc. etc. Nothing to cheer about in that list.

Unless, that is, one had plenty of available cash, golden credit and didn’t mind taking risks. For those with that m.o., there was plenty to take advantage of thanks to the carnage the markets have provided them with over the past two years. For example, with interest rates lower than we’ve seen in decades, there were terrific opportunities to refinance and/or purchase homes— provided your credit was stellar enough to get a loan. Or, invest in the market. Instead of cherry picking shares of stocks from great companies, many investors fled Wall Street and missed numerous buy-low chances.

But that’s how we are—when we’ve been burned or scared we run.

And we’ve run so far that the DJIA is beginning this New Year of 2011 right about where it began on January 3, 2000. It started that year at 11,501. The last time I looked today (12/31/10 at 12 noon) it stood at 11,571.

So, looks like the market is beginning the New Year with a clean slate.

I’m hoping that you are too and that 2011 will offer a new beginning that brings with it laughter, good health and prosperity for you and yours.

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