The French saying, 'the more things change, the more they remain the same' is an excellent description of the performance of the Dow Jones Industrial Average in the first decade of the twenty-first century. The Dow closed at 11,497.12 on December 31, 1999. It will close out 2009 at almost the same price.

This lack of progress has been seen before between 1966 and 1982, when the Dow kept reaching the 1000 level but couldn't break through it. While the Dow ultimately went sideways during the last decade, the S&P 500 was down approximately 23% and the tech heavy Nasdaq fell about 44%. So much for buy and hold. The small cap Russell 2000 was up 24%, but this was minimal compared to the money that could have been earned in commodities. Many emerging stock markets outperformed both the U.S. markets and commodities.

The major U.S. indexes all closed at new highs for the year in a holiday-shortened trading session.

The Dow Jones industrial index rose 0.51 per cent or 53.66 points to close at 10,520.10.

The folks at Seeking Alpha asked me to give them some thoughts on what 2010 might look like for investors. In all deference to that Chinese proverb, these have been interesting times and are likely to remain interesting a little while longer.

In a similar article about what 2009 might look like, I opined that we would be in for a massive rally. That article drew 100 comments, which is by far the most for any post or article I’ve ever written. The general tone of those comments was to call me an idiot for thinking a 30-35% rally could be in the offing. Part of the logic there was that often after big scary declines that threaten the future of civilization as we know it, there is an enormous rally. The Dow Jones Industrial Average went up about 75% over one stretch in the early 1930s, so while I could have been totally wrong, of course, I was not calling for something without precedent.

The S&P/TSX opened higher led by a rally in materials stocks - gold, base metals, uranium, fertilizers and forest products.

Overall, the major North American indexes were up less than one-half of one per cent.

Canada caught a bit of a cold from the United States’ big sneeze, but 2010 is forecast to be a better year for our neighbors to the north and their ETF.

Canada is set to have a bright 2010, according to analysts, as the country boasts a stable banking system. The country branched out and away from relying on the business of the States and has tapped many other foreign markets that need the Canadian resources.

This piece is part of an ongoing project to identify countries that have a potential to provide high investment returns while exposing investors to less market risk. It constitutes part two of my “Seeking High-Alpha, Low-Beta Countries” series - part one was published by Seeking Alpha last week.

Ever since I’ve been involved with investing, I’ve been on a quest to find exceptions to the dictum that high returns are associated with higher risks.

It’s been a wild ride in 2009, especially for gold prices, the U.S. dollar and interest rates. Have the events of this year rendered any clues for ETF investors about what to expect in 2010?

It was a down year for the U.S. dollar. As economic conditions shift, investors are putting the currency under the microscope in an effort to determine what’s next. Ben Levisohn for BusinessWeek believes that in 2010 the dollar will be center stage again—only this time it will be a highly volatile greenback that challenges investors.

Among the foreign stocks listed in the U.S. markets, Canada tops the list with the highest number of listings. Hence US investors have the option to invest directly in many Canadian companies individually as opposed to investing in a bunch of companies via the iShares Canada ETF (EWC).

The following is a list of Canadian companies listed on the NASDAQ market:

In our previous article, we alluded that in a diversified portfolio, putting a long term timing indicator such as 10 month simple moving average on risky assets such as stocks, commodities could effectively reduce risk (i.e. big loss) while improving return. Investors are in a heightened state of anxiety these days as equity markets are consistently at a level where some analysts find them overvalued (such as John Hussman's recent analysis or Robert Shiller's Cyclically Adjusted 10 Year PE ratio). Using a long term timing indicator to safe guard these portions of a portfolio is an effective way to do so.

In the international stock asset, investors could utilize today's diverse array of country ETFs to get an exposure. The following is the list of country ETFs used in this strategy:

While international ETF investing has proliferated over the past few years, many investors have focused on far-away economies, forgetting markets much closer to home that can offer compelling returns.

Canada likely doesn’t come to mind when most investors are looking to achieve geographic diversification, but ‘The Great White North’ has one of the most diversified economies in the developed world. In addition, the country is fiscally sound, is home to banks that are in a position of strength and enjoys favorable diplomatic relations around the world. With the eyes of the world soon to be focused on Vancouver for the 2010 Olympics, Canadians will have an opportunity to show the world what many investors have already discovered.

Now comes the harder part of timing the withdrawal of these measures.

If you asked me this question last year, I would have said yes but not it’s not as bad as Ireland or the U.S. However, the Canadian economy and Canadian banks have weathered the storm brilliantly. So most people think the answer is now no.

Nevertheless, house prices are high and rising and this has David Rosenberg agreeing with me. To the question is the Canadian housing market a bubble he says:

A year ago, Seeking Alpha published a piece of mine entitled “Calculating Country Risk Observed By Betas”.

Since equity markets tend to go up and down in a synchronous fashion with the world markets, owning a country risk itself means owning a piece of the general “market risk”. The article intended to unearth systematic risks that an investor undertook merely by the action of going long a certain country via an ETF or any such investable index.

Two North American employment reports were released last Friday. The U.S. unemployment figures were widely reported and showed a decline of 0.2% to 10.0% for the month of November. The second, receiving less attention in the press, were those of Canada which showed a 0.1% drop to 8.5% but substantially more job growth. This week markets are ready to call an end to low interest rates and are speculating again on the timing of the rate hikes from the U.S. Federal Reserve.

Contrasting the report with that of Canada reveals some of the weakness in the U.S. version. There are some reasons for cautious optimism on global recovery but not because of the U.S. unemployment report. Unfortunately, rate hikes (which many Asian nations would like to see) are likely to be tied to true job creation.

By Brandon Clay

Emerging markets are captivating investors again, but tidy profits aren’t always far away. Placing your bets on well-established global markets can also prove rewarding. That’s why we’re looking at Canada.

Russia, in the top position, is the same as the best performing stock markets, ranking with better return because of currency appreciation against the USD but also because of different holdings in the RSX portfolio.

Canadians observed the sub-prime crises and consequent financial meltdown with morbid fascination, all the while congratulating themselves that it would not happen to them. After all, the laws forbade anyone from walking away from an underwater mortgage and strict rules were in place to even qualify for a mortgage.

The fact is, over 90% of existing mortgages in Canada are "securitized" - that's the practice of pooling mortgages and other loans, then issuing new securities backed by MBSs, or Mortgage Backed Securities. In order to find buyers for these securitized mortgage pools, the Canadian Government has put guarantees on them by directing the Canadian Mortgage and Housing Corporation (CMHC) to guarantee ALL Canadian mortgages.

By Patricia Oey

For most investors, we recommend a 20% to 25% allocation in foreign equities, given their diversification benefits within a portfolio. Investing in foreign equities provides a hedge against a weakening United States dollar and allows for exposure to faster-growing economies. Passively managed ETFs that aim to cover a broad regional or country index are an easy way to invest in macroeconomic themes. Investors have enthusiastically embraced this asset class in 2009. For the year to date through October, net inflows into international stock ETFs reached almost $23 billion, accounting for almost 36% of total net flows into ETFs.

The twisted, tortuous tale of ethanol as the great hope for an energy-independent America holds an object lesson for us all. What I wrote in my most recent article for SA, on a different subject, holds equally true here:

Entrepreneurs make money; early investors make money; and later investors make money if the business model is a good one and is able to adapt to changing conditions. But bureaucrats and politicians? They take money, they don’t make it! By the time a light bulb goes off over their heads to ride a successful wave, the wave has passed, friends. And they are left out at sea, after dark, with some mighty hungry sharks.

The old normal allocation between the three most basic classes (Cash, Bonds and Stocks) is currently the new normal.

While the old normal return expectations for U.S. securities, and the allocation between U.S. securities and global securities (particularly emerging market securities), is not likely to resemble the past, the old normal weighting between cash, bonds and stocks from whatever country is more likely to be used than not.