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Financially, the decade of the 2000s was one that most people would probably like to forget. We kicked off the decade with the bursting of the tech bubble and the events of 9/11. Along the way, we witnessed the housing market collapse and wrapped up the decade with the worst United States economic recession since the Great Depression.

When all is said and done, the Dow Jones Industrial Average will finish the decade about 1000 points below where it started. Interest rates are at some of their lowest levels ever and unemployment rates are in the double digits for the first time in decades.

Things are about as bad now as they’ve been in a while, but that doesn’t mean there isn’t reason for optimism. Our government has said that the recession that’s been affecting us for the last two years ended this past summer and, statistically speaking, such long periods of time with losses are relatively rare.

So where might things be headed in the next decade? If there’s anything that the past decade has taught us it’s that nothing is predictable. Yet, that won’t stop me from trying! Here’s one person’s educated guess at what the next decade will look like.

Stock Market Performance

Where it’s at: For the decade of the 2000s, stocks on the New York Stock Exchange averaged a loss of 0.5% per year making it the worst calendar decade performance in about 200 years. With the rally in stocks over the last nine months, P/E ratios are starting to border on expensive again making future gains uncertain.

Where it’s going: Even with the past decade to consider, investors shouldn’t count on the frothy double digit returns of the 1990s. Jobless recoveries like 2009 generally don’t bode well for long-term returns so investors may have to be satisfied with single digit returns until the economy begins humming again.

My guess: Average returns around the 5-6% per year area until GDP and employment numbers begin improving.

Interest Rates

Where it’s at: Rates on fixed rate mortgages continue to hang around all-time low levels as the housing market tries to recover but savings rates are abysmal. Most money market mutual funds sport yields at under 0.10% and many yield absolutely nothing.

Where it’s going: The Fed will continue to keep rates low to stimulate the economy. Once they have an indication the economy is growing, expect rates to rise to hold off inflation but it may be a while before we see that happening.

My guess: Mortgage rates remain low for the foreseeable future – at least another year and probably more. Rates on savings accounts will stay low in 2010 before rising in 2011 once the economic recovery is more sustained.

Unemployment

Where it’s at: The jobless rate is over 10% but it looks like it’s peaking. Hiring has remained pretty stagnant as companies wait for demand to pick up before committing to adding staff.

Where it’s going: Past recessions have suggested that it takes years for unemployment rates to return to their pre-downturn levels. With the depth of the recession we’ve experienced the past couple years, this could take a while.

My guess: The unemployment rate dips slowly to 9% by the end of 2010 but it will be around 2015 before the jobless rate sniffs the 6% range again.

Source: What to Expect in the Coming Decade