How to Maximize Investment Earnings in 2011

The stock market has enjoyed 2 years of strong gains thanks to an impressive bull market, but will it continue in 2011? Experts are once again split down the middle as to whether the stock market still represents valuable investment this year. Retail investors have only been pumping money into stocks since December, meaning most of the growth was from mutual funds and other companies that invested. Many retail investors actually sold stocks during the bull market run and are now heading back in. Your strategy for maximizing investment earnings this year will have much to do with whether you invested in 2008, 2009 or are only thinking about it right now.

The Bull

Believers in the bull market are betting that stocks will continue to enjoy a run up this year, though nowhere near how it performed the last two years. The stock market seems to ignore the news and steadily marches forward with many believing that the economy is poised for a recovery. They say the stock market is usually 6 months ahead of the real economy.

The Bear

There are others who think the stock market will work its way back down this year thanks to a number of problems. Unemployment is still hovering at uncomfortable levels, housing is still in shambles and commodities are on the rise. As the Fed continues to print money, inflation may be a problem as well. Tensions in the Middle East also means that oil prices and other commodities can be affected.

No one can predict how your investments will perform with absolute certainty, but diversifying is key. Also make sure you’re investing in CD accounts and savings accounts that will yield a safe investment.