BOSTON (CBS) – 2011 is almost gone. Time seems to slip through my fingers like sand; a year ago I sat in this very spot and talked about the economy.

What was my outlook for 2011? I was concerned that corporations would continue to sit on a pile of cash and they have. Not hiring and not expanding except for Ford.


In addition, I expected the stock market to be a roller coaster ride and it did not disappoint. 200 point swings are now the norm!


The wild card for 2011 I thought would be the global economy. And it was. Causing more than a little volatility in the markets all year.


So what do I see in my crystal ball for 2012? It’s cloudy! But I think it’s good.


It will continue to be a jobless recovery but I do see the light at the end of the tunnel. For a while, I thought someone had unscrewed the light bulb in the tunnel but there is hope.


Jobs are recovering. Some companies are giving raises and bonuses and re-instituting 401(k) matches. However, if you are still under employed that does not make you feel good. It will be better for the kids graduating from college this year. But they will need a marketable degree.


Consumers will have a frugal mind set. Consumer spending accounts for about 70% of GDP and with less spending the economy will take longer to recover. Although consumers did have a good time shopping during the holidays.


As the stock market and the housing market recover consumers will feel wealthy again. And they will begin to spend again. But not like they did at the beginning of this century and they will be a lot smarter about borrowing.


I think 2012 will be a good year, one in which the stock market continues to recover and investors get smarter about owning a balanced portfolio. I’m not good at predicting a number for the market but I do believe it will be positive as the world economy continues to recover.


The wildcard for 2012: There are 2. Number 1: Our government. Our politicians are not interested in working together on the problems we are facing. They just want to be sure they get re-elected. And it’s an election year so we will be inundated with negative campaign ads. Many have already started.


Number 2: The global economy especially China and Europe. We have no control over what happens outside the US borders. We can influence but that is it!


One more thing:  A bit of history. The last major recession was 1973-1974. If you had invested $1 million in the S&P 500 on January 2, 1973, one year later you would have $853,450, one year and 9 months later it would only be worth $573,780.


If you had pulled out of the market and put your money in a 5% CD in 10 years you would have $934,627. Almost fully recovered.


But if you had not touched the investment you would have recovered in two years and in 10 years you would have had $2.4 million.


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