About this time every year, the financial press is replete with predictions for what the market likely will do in the year ahead. This cavalcade of collective opinion was exemplified in last weekend’s edition of Barron’s, where the cover story, simply titled “Outlook 2011,” featured 10 prominent market strategists and investment managers making their calls for 2011.

The collective wisdom this year, according to the pundits featured in Barron’s, sees the S&P 500 finishing 2011 near 1,373. That’s about 10% higher than last Friday’s close of 1,244. Now, I think the call for this kind of solid, yet conservative, gain in the S&P 500 is indicative of the trepidation that most market watchers -- myself included -- harbor when it comes to stocks and the economy.

A slight majority see 2011 as the year when a sustainable economic recovery finally develops, and when the bull market and economic skeptics finally are won over. The thinking here is that if the overall economic climate improves, then companies finally will start putting their accumulated cash to work in new investments and new jobs. In turn, that will precipitate an even greater cascade of economic activity -- and by extension, a big surge in the equity markets.

Certainly, I would like to believe this prognosis. But I have to say that, as of now, I’m going to consider myself part of the crowd of skeptics. This crowd basically argues that factors such as continued slow economic growth, high unemployment, escalating trade tensions, tightening credit conditions in emerging markets, and the outlier events such as military confrontations involving the West and Iran, as well as conflicts on the Korean peninsula, will team up to create another eminently volatile year.

One look at the chart here of the S&P 500 so far in 2010 gives us a true sense of just how much volatility we’ve experienced on our way toward ending the year at new 52-week highs. If the coming year is anything close to the year we’ve just had, then approaching 2011 with a cautious sense of skeptical optimism certainly will serve Alert readers well.

The bottom line here is that when it comes to 2011, I’m hoping for the best, but prepared for the worst. Fortunately, when it comes to investing successfully in the equity markets, this approach is a winning formula in any year.

If you would like to find out more about how I’ve refined my market-beating formula over the past three decades, then I invite you to check out my Successful Investing advisory service today.