2010 Outlook: Jobs, Housing and Stocks

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

I'm no prognosticator, nor am I an economist, but here's my two cents about 2010 economic outlook: it's a case of the good, the bad and the ugly. I touched on some of these theme this morning on The Early Show, when I appeared with Charles Schwab's Liz Ann Sonders for an interview with Maggie Rodriguez (Click here to view the video).

So here's another way to look at the good, the bad and the ugly for jobs, housing and stocks:

Jobs:
• Good: Job loss is tapering off
• Bad: 7.2M jobs lost since 1/08
• Ugly: 10% unemployment will persist well into 2010

Housing:
• Good: Housing is stabilizing due to low prices, low interest rates and first-time buyer tax credit
• Bad: mortgage rates expected to rise in 2010 and tax credit expires 4/30
• Ugly: Foreclosures persist - 2.4M expected in 2010 (2M in '09 and 1.7M in '08) AND 1 in 4 mortgages are under water

Stocks:
• Good: Stocks recovered over 60% from March lows
• Bad: Stocks still almost 30% below 2007 peak
• Ugly: Rising markets might lure some to chase returns

Bottom line: we're better off than we were a year ago, but challenges remain.

Still, looking back at 2009 and ahead to 2010, I can't help but smile. For nearly two decades I have been extolling the virtues of diversification to clients and the public. I promise not to say I told you so, because that's not very nice. Still, it's great to feel validated. If ever there was proof to my mantra, the 'aughts were it! Asset allocation and rebalancing saved what could have been a lost decade for many.

While a portfolio of 100% stocks lost under 1% a year for the past ten years, diversified investors squeezed out 3% gains over the same time. It's good to know that you don't need armor to protect yourself - a good ol' financial game plan will do the job.

More on MoneyWatch:
•Best Ways to Lose Weight
•Best Money Moves for 2010
•Did the Fed Cause the Recession?
•Don't Bet on a China Boom in 2010
•7 Ways to Ruin Your Resume
•Resolutions: Our Own Money Goals
•5 Predictions for a New Decade

(CBS)

Jill Schlesinger

Jill Schlesinger, CFP® is the Emmy-nominated business analyst for CBS News. She covers the economy, markets, investing and anything else with a dollar sign on TV, radio (including her nationally syndicated radio show), the web and her blog, "Jill on Money." Prior to her second career at CBS, Jill spent 14 years as the co-owner and chief investment officer for an independent investment advisory firm. She began her career as a self-employed options trader on the Commodities Exchange of New York, following her graduation from Brown University.

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