Investors can be forgiven for losing faith in the financial markets. Only a year ago there was reason to believe there was light at the end of the tunnel. In truth, it was an oncoming train.
Now we face the worst economic times since the Great Depression. The coming year will bring more job losses, bankruptcies, foreclosures, cutbacks. Consumers and companies will spend less, dig out of debt, save what they can. The incoming administration of President-elect Barack Obama will try to do its part -- keeping interest rates low, funding job-creating projects and printing money to stimulate the contracting economy.
Recovery will take not months, but probably years. The age of austerity has replaced the age of avarice, and we will have to adjust purse strings and investment portfolios accordingly.
A sea change in the global markets was evident more than a year ago. Recession was on the horizon, and a defensive stance was in order.
Yet few experts spotted the economic tidal wave that has destroyed so much wealth. Most of the investment strategies last year were taken to the woodshed with just about everything else.
After such a devastating year for stock investors, the idea of putting money into anything other than cash must seem like advice out of left field. But there are investments that can stand up to whatever 2009 deals and allow you to ride out the recession intact, if not in the money. Most of these themes are designed to generate yield -- reliable income that acts as a rudder in choppy markets.