What the experts say

One market, three threats

“After one of the most volatile periods for stocks in decades,” it would be nice to think investors could sit back and relax in 2010, said Paul Lim in The New York Times. But there’s no such thing as a market without risks. Right now most strategists worry about three things: disappointing earnings, frothy valuations, and government policy. The still-worrisome employment situation suggests current stock prices are overly optimistic. Many valuations—as measured by the 10-year average price-to-earnings ratio—are significantly higher than their historical averages. Finally, the Fed may very well raise short-term interest rates this year, which could knock the wind out of the market. Given all the uncertainties, says Duncan Richardson, chief equity investment officer at Eaton Vance in Boston, “investors need to be more diversified than ever.”

Tech stocks grow up

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If you turned your back on tech stocks a decade ago, give them a second look, said Chana Schoenberger in Kiplinger.com. Today’s tech stocks are different from the “dubious” dot-coms of yore. They don’t carry a lot of debt, giving them the ability to “snap up oFacebookther companies as the opportunity arises.” Often, they have strong ties overseas, so they’re a good hedge against a falling dollar. Your best bets are “behind-the-scenes” companies such as Cisco Systems and Applied Materials. Cisco makes routers, switches, and networking equipment. Applied Materials sells machines used to manufacture everything from semiconductors to solar panels.

Can Facebook affect credit?

It’s become common practice for marketers to glean information from social-networking sites, said Aleksandra Todorova in SmartMoney.com. Right now lenders may be studying your Facebook and Twitter updates “to gauge your creditworthiness.” In particular, small, private lenders seem most likely to tune into your tweets to get a better idea of your lifestyle and how likely you are to pay. “Chances are slim” that larger lenders bother to keep tabs on you in detail—but if they do, it could be considered a violation of the Fair Credit Reporting Act. To be safe, give lenders a different e-mail address from the one attached to your social-networking account.