Year-end is high season for stock market predictions. When to get in, what stocks to buy, whether to buy gold and on and on.

Can you name a single "guru" who told investors to get out of the markets before the crash of 2008 -- and to buy back in before the recovery of 2009? If the talking heads can't call the worst recession since the Great Depression and one of the fastest recoveries in 80 years, why should you rely on their current predictions?%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 paylosize-small"%%Instead of relying on these emperors with no clothes, here are seven reasons why you shouldn't invest any money in the stock market in 2010.

Reason #7: If you don't understand the difference between investing and gambling.

Investing is for the long term. Gambling is for those seeking immediate gratification. If you don't have at least five years before you will need 20% of more of the amount you plan to invest, stay out of the stock market.

Reason #6: If you think you can time the markets.

Market timing is nothing more than rank speculation. There's no evidence anyone has the ability to time the markets. Most market-timing newsletters last about four years before going out of business. If these "experts" can't consistently time the markets, neither can you.

Reason #5: If you think you can pick stock "winners."


Stocks are fairly priced, based on all available information about them, which is transmitted instantly to millions of investors. It's tomorrow's news that moves stock prices. Do you know tomorrow's news? Then don't try to pick stock winners.

Remember Lehman Brothers, Washington Mutual, Worldcom and Enron (among many others). Many investors thought these stocks were "winners." They all filed for bankruptcy.

Reason #4: If you think you can pick a winning mutual fund.

Good luck. Only one in three mutual funds will beat their benchmark in any one year, and more than 95% will fail to do so over a 10-year period. Those are lousy odds.

Reason #3: If you intend to rely on the advice of a broker or adviser who claims the ability to "beat the markets."

Unfortunately, this includes virtually every broker and the vast majority of advisers. A comprehensive study recently compared the returns of investors using brokers and advisers with those who invested on their own. The mutual funds selected by brokers cost more and performed worse than those selected without their "expertise." The study also found brokers didn't provide superior asset allocation or help correct bad investor behavior, like chasing performance.

The conclusion is inescapable: "Market-beating" brokers (and advisers) are a peril to your financial well-being.

Reason #2: If broker misconduct causes you losses and you want a fair and impartial forum to resolve your dispute.

You won't get one if your account is with a broker in this country. Instead, you'll be required to submit to mandatory arbitration before the Financial Industry Regulatory Authority. One member of the arbitration panel will likely be employed by the securities industry. You will have no right to a trial by a jury of your peers.

A recent study found most participants in these arbitrations perceived them to be unfair. A current commissioner of the SEC is reported to have stated her opposition to mandatory arbitration, joining many consumer groups that oppose compelling consumers to arbitrate their disputes before forums of questionable impartiality.

Reason #1: If your goal is to make a "killing" in the markets.

It's far more likely the markets will have you for breakfast. Based on all available data, most investors would be far better off if they never invested in the stock markets and bought Treasury bills or a short- or intermediate-term bond index fund instead. In stark contrast, investors who simply captured market returns, with a globally diversified, risk-appropriate portfolio of low-cost index funds, did just fine. Only 10% of individual investors fit into this category.

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