It Won't Be Easy

The reward for work well done is the opportunity to do more.
-- Jonas Salk

After low volume for the last couple of weeks, trading for 2009 kicks off in earnest this week. A lot of folks were looking for a quick start to the year and drove up stocks sharply on Friday, but volume was light and there was obviously some new-year strategies being implement, like "Dogs of the Dow," which caused some unusual action. We still have positive seasonality working for us, but things are likely to quickly become a bit trickier.

There seems to be quite a bit of optimism about some better action in the near term. Technically, the charts have turned up, although on light volume, and there are high hopes for the new year and some of the things that President-elect Obama may implement. After the pain of 2008, many are thinking we not only are due for a rally but are owed one.

The chances of some bear-market rallies in 2009 are very high, but we shouldn't expect it to come easy. We are going to make some big moves and get folks excited, but there has been a tremendous amount of damage done to both stocks and the economy, and a smooth and easy recovery is unlikely.

The key to success in 2009 is going to be much like the key to success in the past. It is going to take some hard work, day after day. There are those who will want to make some grand predictions and big bets about the future -- and some may even end up being right -- however, it is those who plug away at it day after day who have the best chance of success.

If we protect our capital, manage our risk and keep looking for opportunities each day, we will prevail. The great reward of such an approach is that we can keep on doing it forever and keep building up our economic security.

We have a little weakness to start the day and I'm seeing quite a few downgrades from analysts, but after the rather surprising strength on Friday, I imagine there are some folks anxious to catch up with the indices quickly. Don't be overanxious -- we will have plenty of time to find opportunities, and this end-of-the-year action isn't a very good guide to how things will develop from here.

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James "Rev Shark" DePorre is the author of Invest Like a Shark: How a Deaf Guy with No Job and Limited Capital made a Fortune Investing in the Stock Market. He is founder and CEO of Shark Asset Management, an investment management firm, and he also operates sharkinvesting.com, an interactive online community that serves and educates active investors. DePorre holds business and law degrees from the University of Michigan, is a member of the Michigan Bar Association and a former tax attorney and CPA. He lives in Anna Maria Island, Fla., with his wife and two children. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Rev Shark appreciates your feedback; click here.