What a year 2009 has been in terms of investment markets, the economy and politics. A prediction of the events that were to unfold would have been thought unbelievable.

We have seen the collapse of high street banks and in the US Lehman brothers being allowed to go bankrupt. Between January and February this led to a meltdown in global equity markets. The UK continued in recession and the government has injected unprecedented amounts of tax payers money into a fiscal stimulus package.

Since March 2009 equity markets have rallied and although not back to their heights of 2007 much of the paper losses of 2008 have been recovered. Where does this leave us for 2010?

I believe for many investors 2010 will be a critical year. On the up side we see a stock market which is continuing to move up. There is every chance in the very short term we may see further appreciation. Technical indicators show economic growth maybe returning and there does not seem to be a significant let up in consumer spending.

But let’s look at the fundamentals. The fiscal stimulus has been at some cost as the UK national debt is now £180bn. Unemployment is still rising. The banks are not lending and may still have further defaults to write off. Demographically we are an aging population and as the baby boomers slip into retirement consumer spending will fall. This will lead to a reduction in corporate earnings.

For investors this will eventually provide a very good long term buying opportunity for equities and this will be based on a sound recovery rather than false dawn

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