) -- The stock market shot back, mortgage rates dropped to record lows and the economy grew for the first time since the end of 2007. Still, 2009 was hellish for most Americans.

Heading into the New Year, there's a mix of fear and optimism. The urge to limit losses, however, can be an invitation for blunders. Here are some things to avoid in 2010:

Looking backward, not forward:

Sticking with a recessionary game plan and playing it safe isn't going to rebuild wealth. There's been a knee-jerk pullback from equities (with outflows of $32 billion in 2009), and a push into safer securities such as Treasuries and municipal bonds, despite thin yields. U.S. bond funds are closing in on $370 billion of inflows for the year.

There are some glimmers of optimism and a strategic revision may be developing.

A survey by

Charles Schwab

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earlier this month found a growing bullish sentiment among active traders. Half of its respondents claimed a positive outlook for the market in the next six months, up from 34% in July; 63% plan to increase trading in the next six months. About 55% are holding 30% or less of their long-term portfolio in cash or cash investments.

Don't fear the stock market. The benchmark

S&P 500

, which fell by half from peak to trough, has risen 23% this year. Big companies like


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have weathered the storm and moved onward and upward. Sitting on the sidelines too long meant missing out on the stock-market rebound that could have gotten investors halfway back to where they were.

Limiting yourself:

Diversification is crucial to a healthy portfolio and a necessary hedge in case one industry loses steam. Sticking with the safe (bonds) or the tried-and-true (large-cap stocks, popular mutual funds) could prove shortsighted.

Individual investors may have already opened their eyes to the full array of opportunities.

Zecco Trading

, an online trading platform, said in a poll of 1,100 traders that 27% plan to invest in options, 22% in currencies and 24% in commodities in 2010. The pre-stock-market crash levels were 13%, 10% and 11%, respectively.

According to the Schwab survey, 55% of investors say they're using exchange traded funds, up from 43% in July. That bodes well for those who see ETFs as a stepping stone to more complex investment strategies.

"Though they are often thought of as a very risky investments, options, used correctly, are a great hedge and a great way to optimize portfolios," says Michael Raneri, Zecco's chief executive officer.

Failing to get good advice:

Your favorite bartender may know all about blended whiskey, but is he really a reliable source when It comes to asset allocation?

Too many people rely on friends, family, co-workers and casual acquaintances to assist in financial deliberations. In doing so, they may be bypassing informed guidance they really need.

According to Zecco's Raneri, 65% of the investors surveyed, most of whom describe themselves as "self-directed," said they "never use an adviser anymore" and 35% say they use one on occasion, when they need to validate a move.

Online tools are increasingly taking the place of professional expertise, Raneri says. He sees many turning to online forums for advice.

"Instead of validating ideas against an adviser, they are validating their ideas against people who have the same approach, the same discipline and the same investment philosophy in a community, and they are starting to follow each other's ideas," he says.

Risking too much:

There may be a temptation to live for today, when investors really need to look to the future. Age, income, goals and risk tolerance need to be considered more than the desire to "make a killing."

"How much risk you can bear to take versus how much risk you can psychologically stomach -- you might have two different answers," says Neal Ringquist, president of

Advisor Software

, a company that develops products that assist advisers in building investment portfolios for individual investors. "You have to get the asset allocation right before you decide what your implementation vehicles are. The first thing people need to do is assess what their goals are and align their investment strategies with their goals."

-- Reported by Joe Mont in Boston.