updated 12/22/2009 7:32:08 AM ET 2009-12-22T12:32:08

As we speed through the last few trading days of 2009, it's time for all of us to turn our attention to what is sure to be an interesting and eventful 2010.

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So, let's take a look at what investors should be keeping in mind - and on their radars – as we enter the next phase of the economic recovery.

Read below for a list of what changes and what stays the same in 2010, the macro trends to watch and some parting thoughts.

What changes in 2010, what stays the same:

Unemployment still high and rising
The unemployment rate remains the ultimate barometer of how well the recovery is doing. The initial $787 billion stimulus package was supposed to create or save millions of jobs, but so far success can only be measured in terms of "what could have been." It's a safe bet that the stock market can't get on a sustainable uptrend until new jobs are being created, and the unemployment rate begins to tick down.

As long as unemployment is rising, bears will have strong ammo to retain their stance in market discussions. Investors should remain cautious of companies and industries that rely on consumer spending until we see concrete evidence of higher employment.

Home tax credit extended
The $8,000 new buyer credit now runs through April 2010, and an additional credit offers $6,500 to homeowners that have lived in their home for at least five years and are looking to relocate their primary residence. This should help to buoy the home market, retailers like Home Depot and Lowe's, and other home appliance and home improvement stocks.

Housing led us into this mess, and at some point it will need to help lead us out. Housing data follows employment data as the most important economic indicators heading into 2010.

Financial regulations, bank strength
Potential regulations that would add a small tax to financial transactions shouldn't affect retail investors much, but it could crimp the earnings at financial institutions (many of which have trading arms), and at exchange companies like NYSE Euronext and NASDAQ.

Bank health will continue to dominate headlines. We might see the vast majority of TARP funds repaid to the U.S. Government by the end of 2010. On December 2, Bank of America got approval from the Treasury Department to repay its $45 billion in remaining TARP loans. Bank of America subsequently sold nearly $20 billion in stock to raise cash, and its move could be followed by similar actions at Citigroup and Wells Fargo.

As long as GDP growth remains solid (2.5 percent or higher is a good benchmark), banks should see a strong 2010. The fact that Bank of America could sell so much stock so quickly is a good sign that investors have confidence in the sector, and quicker TARP repayments would give the government some leeway in offering more direct assistance to small businesses, which would spur job growth.

The dollar/commodity trade
The combination of a falling U.S. dollar and higher commodity prices has been the most consistently profitable investing theme of 2009. Most signs point to the dollar remaining low in 2010, but if we see any signs of inflation in economic indicators like the CPI and PPI, expect the dollar to start recovering as short-term interest rates will head higher.

Investors should have some stock exposure to commodities as well as stocks with a high percentage of exports, but don't bet the farm on them. This area has had an extremely good 2009 and could be due for a drop, or at least a slowdown.

Some things to watch:

There's cash in them thar hills!
We continue to see investors holding cash, trillions in fact. This means that as more people have faith that we are indeed recovering, there is a lot of kegged gunpowder that can fire into stock markets next year.

Stocks begin heavy lifting
Companies need to start showing revenue growth, not just EPS growth. Most cost savings have already been wrung out of companies, which has been good for boosting margins and giving us some earnings per share surprises, but this phase is over.

We need to see companies selling more goods and services, both at home and abroad. This is the only thing that will spur jobs growth and higher earnings, which the stock market needs to see before higher stock prices can be justified. Investors gave most stocks a "free pass" in 2009 given the recession, but in 2010 investors will be much more stingy about defining success and failure.

Interest rate watch
Interest rates remain at ultra-low levels, and so far the rhetoric out of Ben Bernanke and the Federal Reserve is to keep short-term rates low for "an extended period of time".

Investors should be very cautious of overweighting long-term bond funds. As soon as there's a whiff of either inflation or pending rate hikes, longer-dated bonds could take a big hit. Consider holding a blend of higher-yielding municipal bonds, corporate bonds, and inflation protected TIPS investments instead. There are hundreds of ETFs and mutual funds that can give you this broad exposure at a very low cost.

And some parting thoughts
Investing is a tricky business, and the most experienced professionals will confess that. Most economists agree that the recession will be over soon, but we could still see very slow growth in 2010.

But don't fear the stock market just because we've had a good run lately.

Major indexes are still well below where they were a decade ago, even though company earnings are comparable, and have indeed grown at many companies. There is plenty of room for upside as long as the recovery is for real, and we don't slip back into recession.

© Investopedia ULC

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