The appetite for “Crystal Ball” predictions seems to be insatiable. Despite the fact that I am consistently wrong on the timing of my predictions, not the direction, I’m good at that, but when it happens, not so good, I have been asked to do another prediction article.

Steve McDonald looks ahead to the investment climate in the new year. He sees a bounce in the Dow reaching as high as 11,000. But an economic recovery will depend on whether the Obama administration can restore confidence in the public. For 2009’s top money-makers, Steve picks six high-dividend stocks and two corporate bond plays.

The investors that have been wiped out in this downturn are the ones that did not plan ahead, says Steve McDonald. Booms and busts are the nature of economic cycles. And investing only in stocks is financial suicide. Steve says to survive this crisis – and the inevitable ones that follow – investors need to diversify their portfolios and stick to tried and trusted models.

With all the talk about “The Middle Class” in this past election, I thought it might be useful to take a look at the tax situation of the middle class, to see how we folks have been faring.

Chasing market moves is the worst way to invest, says Steve McDonald. And piling everything into one asset class will not work either. Over time, you will always make more money with a balanced portfolio. That means a suitable combination of stocks and bonds. Steve comes up with a simple formula to find a portfolio split that works specifically for you.

Congratulations on a long well fought race. Now, “fasten your seat belts, it’s going to be a bumpy ride.” The classic line from Betty Davis seems appropriate. No matter who won this race, they were inheriting a hell of a mess. No need to go into detail, just the list is daunting enough.

“Living on $1700 a month sounds like a very slow, painful existence. Not what I planned for in my retirement.”  If you aren’t already aware of it, the baby boomers have started to retire. They first hit the system a few years ago. Over the next twenty to thirty years, our culture will be challenged as never before by the largest shift of population ever to leave a work force and begin retirement.

The stock markets opened sharply lower again today. Steve McDonald says bonds are a much safer and more profitable alternative right now. Investors should stick to short-term bonds to maintain a flexible portfolio and limit market risk.