If 2009 was a year of plunging lows and buoyant highs that prompted investors' fists to clench in fear and relax slowly -- but not so surely then the next 12 months should be a bit easier on everyone s collective psyche.

After all, 2010 is the year the promised recovery is going to kick in. With a couple of exceptions, most influential market watchers still believe this will be the case. A scan of the 2010 outlooks of major strategists, prominent managers and respected economists tells investors there's plenty to watch for in the new year, and plenty to watch out for as well.

The prodigious writers on Bank of America Merrill Lynch's research investment committee peg it clearly: There are still two ways to go in 2010.

"The coming months will reveal whether the incipient global recovery is real and investors can begin moving beyond the uncertainties of the recent past or whether the bear market will renew itself thanks to a double dip caused by a policy mistake or some other unforeseen event," Michael Harnett and his colleagues write, though they are upbeat in the end. "We believe the unprecedented mix of quantitative easing, zero interest rates and near-record-high budget deficits will engineer an economic recovery while core inflation remains low in 2010."

Barclays Capital chief market strategist Barry Knapp agrees that the foundations of recovery are in place, but isn't sure that will translate into immediate investor benefits after the sharp year-end rally, which saw the S&P 500 stock index rebound about 58% from its March low to Christmas Eve. Most importantly, he's starting to see reasons the Fed may raise interest rates in the foreseeable future.

"While the rally in the dollar, backup in Treasurys, underperformance of financial equities and breakdown of the correlation between equities and credit all point to the markets beginning to discount Fed policy normalization, it may still be too early for this theme to dominate capital market performance," he writes. "We caution against interpreting December moves in capital markets as being indicative of macroeconomic trends," because it's not a normal time of year in the markets, and it's still not a normal market.

But it will get there, says John Praveen, chief investment strategist at Prudential Investment Advisers. In his outlook, he says he expects the S&P 500 to rise to 1,350 by 2010 year-end, and European and emerging stock markets to post over 20% gains.

"Stock markets were supported in 2009 by the speed of the GDP recovery and breadth of the GDP rebound," he writes. "During 2010 equity markets are likely to be supported by the sustainability of the GDP recovery and the strength of the earning rebound. Both GDP growth and corporate earnings are likely to surprise on the upside."

Emerging markets will play a pivotal role in the global recovery, and have been the early standard bearers at the end of 2009. Bank of America Merrill Lynch's global emerging markets team sees a variegated outlook for Asian, European/Middle Eastern and Latin American markets, but it adds up to a positive view.

"On the growth side, emerging Asia is likely to pass the baton to Mexico and emerging Europe. We do not expect a broad-based upturn in EM inflation, but emerging Asia is likely to lead. Policy responses are likely the key issue for 2010."

In the context of this upbeat outlook for a somewhat chastened and changed investing world, Ron Muhlenkamp, the founder and president of investment firm Muhlenkamp & Co., defines investor expectations for what many in the financial commentariat now call the "New Normal." While return on shareholder equity has averaged 13% since World War II, that's going to change, he cautions.

"We think, going forward, that the average may be on the order of 11%. This is attributed to a number of factors, including capacity utilization, new orders for durable goods, consumer spending, etc. With lower ROEs, we expect companies earnings and earnings growth to be subdued. As a result, price-to-earnings ratios may be lower, given the less attractive returns on investments in the business."

That's a useful reminder that a recovery isn't the same as a reset, and in the aftermath of an economic bubble bursting, that's not a bad thing.