The year 2010 was quite eventful, but not in the ways most “experts” and market forecasters predicted. Among other things, they predicted single digit returns for U.S. stocks and double digit returns for Chinese and Brazilian equities. The Shanghai Index (China) did have a double digit return, but it was a negative 14% compared with a positive 12.8% for the U.S., while the Brazilian Index was up a mere 4%. This again demonstrates that having the best reported economic growth doesn’t mean investors in already overvalued (high expectation) equities will benefit from that growth. Forecasters also predicted that Europe would soar and the dollar would plummet. Instead, the European Stock Index was up a puny 1%, the Euro was shunned versus every other currency, and the dollar actually appreciated for the year. The strong performance of U.S. equities was the result of corporate profits that continued to exceed expectations and modest initial stock valuations that provided ample room for appreciation. In short, with low expectations, conditions were ideal for the U.S. to surprise on the upside, but few saw this and fewer still took advantage of the opportunity.