In recent weeks we’ve been hearing much about the “recovery” of the economy. Just this last week we heard a prognosticator predict a strong “V” shaped recovery. However, last Thursday’s market plunge and other factors make us doubt the likelihood of a rapid recovery anytime soon.

Fears of continued problems in the U.S. economy and concerns about a spread of Greece’s debt problems throughout Europe resulted in a 2.6% drop in the Dow Jones Industrial Average to 10,002.18, just above the psychological 10,000 level. This was the biggest drop in the Dow, since last April.

Concerns about Europe had a strong negative impact on commodities, with crude oil down nearly 5% and gold down 4.4% as a result of a stronger dollar. Usually, economic global concerns would push gold higher. Gold’s unexpected drop is a good example of how tough it is to predict what a given market might do next.

How our economy will fare in 2010, we believe, is anybody’s guess. We’re not economists, but we expect a continued slow recovery. After all, unemployment is still pushing 10% and initial claims for unemployment for the week ending January 30th were reported to be 480,000, which was 8000 more than expected. Commercial real estate is now experiencing problems similar to the residential real estate market and foreclosures in 2010 are expected by many to be as high or higher than they were in 2009.

So what does this mean for the average investor? Don’t expect great returns for 2010 and don’t try to time the markets. Maintain broad diversification, focus on lowering investment fees and taxes and cut discretionary spending. Increased savings can help counter low or negative returns. The bottom line? Plan for the worst and hope for the best!