Why You Should be an Optimistic Investor in 2009

For all you market optimists out there, the WSJ recently posted a piece, "2009 Could Be Better Than You Think." How so? The reasons include:

It's a great time to buy stocks. The best advice? "The biggest mistake you can make as an investor is to ride the market down, lose faith, pull out and miss the upturn."

It's a good year to buy real estate. "Fixed-rate mortgages are already at historic lows, and the government is going to use every tool in its bag to get them lower over the course of the year. So if you find a piece of property you want, if the seller is willing to recognize how far the market has truly fallen, and if you have good credit--three big ifs--you can benefit from a once-in-a-lifetime double bonus of low prices and interest rates.

Federal taxes won't rise. Nothing is certain, but, "No politician is going to push for general tax increases in the midst of a severe recession...The new American government has discovered an unlimited (for now) line of credit. The United States government may have led the world into this crisis, but the world now seems more than willing to lend us unlimited amounts of money to lead the way out."

David R. Kotok, Chief Investment Officer of Cumberland Advisors, is also upbeat:

Our outlook is positive. We expect the central banks and governments of the world to continue aggressive monetary and fiscal stimulus. We anticipate credit markets will improve in 2009. Spreads will narrow. Tax-Free Munis and taxable corporate bonds will rally in price. We are avoiding US Treasury notes and bonds.

And finally, DealBook references this note from John Praveen, Prudential International Investment Advisers' chief strategist:

Stocks are likely to recover in [the second and third quarter] as the recession troughs in the U.S. and other major economies, earnings begin to recover, led by financials, credit markets stabilize and deflation fears eases.

But there's a big however in Paveen's message: "2009 is likely to be another volatile year for stocks."