From Gary Booysen on the top floor,

Dear Money Morning Reader,

It’s been one hell of a year. This time last year, investors were recovering from the shock of having almost half their wealth invested in the stock market wiped out. We found ourselves staring down the barrel of a “fear driven” market. And while many were wary of getting their feet wet, those who jumped in were handsomely rewarded for their courage.

But, 2009 was something special. We saw markets mature. And instead of the utter systemic collapse of the global economy investors expected, markets rebounded sharply.

And now, at the onset of a new year, we find ourselves asking a different set of questions: Has the market run up too far? Have we missed out on the huge returns available?

The answer to both questions is an emphathic “no”. Yes, the JSE ran up a total 27.99% for the full calendar year, but it’s still around 10% off its all-time highs. And there’s plenty of space for it to run higher.

So the decision you now have to make is: Should you stick you money in to a money market account – where you’ll earn a risk-free 6% return? Or should you chance it on the market? Like all market watchers, I believe you’re better off on the stock market. Even if it only increases 10% this year and returns to its previous all-time highs, you’ll earn 4% more on your investment than playing it safe. All the indications show you’ll be making a lot more than that this year.

Yes, investors are hesitant that we may be in for a pullback on the market, but I don’t think this will be an issue. After all, if you pay attention to Friedman’s quantity theory of money, you’ll know that as money supply increases so do market prices. And since the US pumped their money supply up by four times last year, there’s no where for the markets to go but up!

What would I invest in?

Personally, I’m still bullish on gold miners. I expect the gold price to rise from current levels to around $1,450 by the end of the year. As such, you’d be remiss not to have exposure to this sector. Especially now that we've seen a dip. In real terms gold is still trading a long way off it's all time high's.

Secondly, it’s not too late to cash in on South Africa’s massive infrastructure spend. Last year saw our construction sector fall flat – the market has been beaten it down hard but for one company there's still plenty of opportunity – this is a truely undervalued sector. In fact, I’ve found one company I'm confident can double in value over the next year or two. I'd love to tell you but I'm afraid it's privilaged information for my Stockmarket Sleuth readers only.

Turning to the markets...

The JSE all share index advanced 0.56% yesterday. The gold mining index slipped 0.56%. Resources added 0.44%. Banks and financials weakened 0.13% and 0.22% respectively. Industrials bounced 1.09% and the platinum mining index jumped 1.33%.

London's FTSE100 shed 1.13%. The Dow Jones collected 0.41% and the Nasdaq closed up 0.8%.

Tokyo's Nikkei gained 1.58%. Hong Kong's Hang Seng added 1.41%.

Brent crude is currently trading at $72.53 per barrel.

Spot gold's trading at $1,089.39 and platinum was last quoted at $1,515.50.

And here's how the rand is performing against the major currencies:
R/$7.56
R/₤12.28
R/€10.61