2008 was the year of the crash and everything went down.
2009 was the year of the strong bounce and almost everything went up.
2010 was the year of stock selection with consumer stocks the winners.
2011?
A few trends I am looking out for.
The commodity rally will continue and, yes, gold will have yet another green year. But will it be the top performing commodity? I don't think so. I expect Platinum and Palladium to be the winners with the latter the white metal winner. Then of course Silver may do a repeat of 2010 and have another spectacular year. Of course the coppers, coal, iron ore and the like will continue upwards giving the diversified miners still more lift.
Looking to the sectors I am expecting construction to be one of the winners. Importantly I am expecting the news to still be doom and gloom from the sector, but as the market looks 12-18 months forward at some point investors are going to realise that the sector isn't just going to die and start buying ahead of a normalisation of earnings.
I would also look for some activity in the small cap and AltX stocks. They got nailed during the tough years and haven't really recovered as money flowed into the large and mid cap stocks. But sooner or later investors will turn their attention the last few areas with value remaining and then they will start some very cautious buying of the small stocks. It will be very cautious as investors tend to have long memories and losses of +90% in same small stocks have left them fearful. The real crazy rally here will only really occur later in the bull run, but it'll likely start this year.
Foreigners will continue to buy SA stocksand bonds as they seek yield and this will under pin our market and also strengthen the rand.
Lastly - the rand. I left this for last as forecasting a currency is a mug’s game - but broadly I expect the Rand to continue to strengthen against the major currencies.
Simon Brown hosts his own radio show, JSEDirect, on Classic 102.7 ands is a frequent market commentator on various TV and radio stations.
His newsest venture is a free, online university to help South Africans manage their money better, it'll be launching in Q1 2011 and you'll find it at JustOneLap.com.