We all know how the markets fared last year; it s what stocks will do in 2010 that investors want to hear about. Some brokers think 2010 will be a nice continuation of 2009, where the Standard & Poor s 500 index rose more than 23%. But others are sounding more cautious. Here are two views on the investment outlook for 2010.

Who s Talking: David J. Kostin, Chief U.S. Equity Strategist, Goldman Sachs

The Gist: Heading into the first half of 2010, substantial cost cuts will continue to boost firms' earnings -- and, by extension, strong market returns.

The U.S. economy remains fragile. However, inflationary pressures will likely hold off as the U.S. enters a so-called restocking phase. Kostin says that the U.S. economy is entering into a growth phase in its recovery. While economic growth tends to remain flat or even fall slightly in the year following a market trough, Kostin says low interest rates will serve as a tailwind pushing the S&P 500 toward 1,300, or up 15%, in 2010. He also affirms that revenue gains thanks to cost cuts, which will lead to improved profit margins, can t hurt either.

Further, Goldman expects more cash to flood the equity markets as investors become less risk averse. In the U.S. equity market, for instance, Kostin estimates that individuals, institutions and corporations will pump in roughly $600 billion in 2010. Kostin is bullish regarding the first half of 2010, but says stocks will moderate by the end of the year. Not only will the fiscal stimulus end in the middle of 2010, but also inflationary pressures will kick up. As a result, the S&P will likely fade to 1250 by the end of the year, Kostin says.

Who s Talking: Teun Draaisma, the co-head of European equity research, Morgan Stanley

The Gist: While the current investor momentum may send markets up higher in 2010, a pullback in fiscal stimulus may curtail the market s strength and cause doubts for 2011.

The Federal Reserve has indicated that even if growth returns, that might not necessarily lead to a change in interest rates. And as long as the U.S. can keep inflation at bay, rates will likely remain unchanged at zero percent. That s good news for investors, says Draaisma: Without tightening, we think growth is unlikely to falter. However, as long as the nation is on a course to grow, in time, interest rates could budge. Here s why: Growth in the economy could spark a call to legislators to ease off of stimulus spending and even attempt other measures. Fiscal spending cuts, higher taxes, re-regulation, removing some of the liquidity measures would all be in the cards and potentially harmful, says Draaisma. The withdrawal of stimulus will be a very dangerous period for the economy and markets; that when the tightening starts in earnest, the markets will consolidate at best.

Such issues likely won t affect the markets in 2010. However, they may very well take hold in 2011, when a stronger economy and an uptick in jobs could lead to reduced government spending and a tighter monetary policy. But in the meantime, we believe we are at the start of an earnings growth cycle, says Draaisma. And although, investors should be leery about getting overly aggressive about taking advantage of the market rally, now s the time to enjoy some upswing -- if only for a bit.