FOR A YEAR THAT STARTED with so many expectations, 2010 is drawing to a less than stellar close. The stock market might be bouncing back, but the economy is still sputtering, yields are lower on everything from government bonds to certificates of deposit, and summer movie attendance hit its lowest level in more than a decade. We even have to look down to find something that s up: Casual shoes for men are among the few high-end fashion categories to see their sales surge this year.

For two tough years the luxury-goods market has been struggling as well, with 2009 s decline of 8 percent the worst ever recorded for the nearly $230 billion category, according to consultants Bain & Co. And yet 2010 could end up being the year of the comeback for all things upscale: Bain is predicting an increase of 10 percent for worldwide sales of luxury goods. To be sure, with the financial crisis still fresh in Americans minds, experts say, folks returning to the diamond counter are being careful with their nonessential purchases. Simple and useful are in; showy and impractical are out. The severe recession rewrote and is still rewriting the rules,
says Milton Pedraza, CEO of research firm the Luxury Institute.

While it might be less conspicuous, it s still consumption and we re here to do our part. Each year SmartMoney does some early holiday shopping, talking to retail experts, strolling through stores and scrolling through online catalogs, all in search of some of the best products for your wish list. To narrow down our picks, we try out our top choices taking a few swings with the new tennis racket, a few steps in the sharp-looking shoes and a few glances in the mirror at that black-pearl necklace.

This year, in keeping with the so-so economy, we focused on indulgences that can work just as well in the carpool lane or at the park as they do in a five-star restaurant or corner office.

Pearls

OUR PICK Black Baroque Tahitian pearl necklace, uniquepearl.com ($1,400) RUNNER-UP Ranjana Khan pearl-studded chain necklace, Bergdorf Goodman ($875) BARGAIN Mastoloni Akoya pearl extra-long necklace, Nordstrom.com ($495)

They're not exactly taking over the jewelry industry: With just 2 percent of total U.S. jewelry sales, pearls are still a bit player in the overall market. But they re holding their own in these cautious times, helped by new shapes and colors and un-diamondlike prices. So while diamond sales have fallen at double-digit rates in each of the past two years, the Jewelry Industry Research Institute reports sales of pearls are steady at about $1.2 billion a year.

Affordability is a big selling point, with prices for a strand of pearls running in the hundreds or low thousands of dollars, compared with upwards of $5,000 for a round, 1.04-carat diamond. But experts say pearls have something else going for them: a culture of innovation. For years the industry standard was the classic white cultured pearl, a safe, if at times dull, choice. But sales of pearls in colors other than white and even shapes other than round now make up about 70 percent of the market, says Kathy Grenier, director of marketing for the Cultured Pearl Association of America. Pearls can also be very current and modern, says Sue Bell, senior VP of merchandising for online jeweler Blue Nile.

For the holidays, consider long strands, from 36 to 60 inches, that can be wrapped or worn loosely la Coco Chanel, and pear-shaped pearls or the slightly off-round pearls that are typically called baroque. While much rarer than cultured pearls, natural pearls also come in a variety of shapes. When comparing pearls of roughly the same size that have a similar blemish-free skin quality, one that is slightly baroque will typically cost a fraction of the price of one that is perfectly round, says Joel Schechter, chief executive of New York based cultured-pearl firm Honora.

It creates great fashion, since every baroque pearl is different like snowflakes, he says.

Tennis Rackets

OUR PICK Babolat AeroPro Drive ($189) RUNNER-UP Prince Blue 110 ($259) BARGAIN Dunlop Aerogel 4D 500 Tour ($159)

The recession hit many people hard, but apparently not hard enough for them to give up their tennis game. According to the U.S. Tennis Association, the number of players grew 12 percent between 2008 and 2009, to 30.1 million. The Sporting Goods Manufacturers Association reports that wholesale racket sales fell about 11 percent, to $104 million during the same period. Experts say that rather than hanging up their rackets, some players are lowering their sights a notch, opting for less expensive ones that still meet most of their needs.

At the same time, racket makers continue to look for ways to make their products more durable, aerodynamic and powerful. Whitney Kraft, who heads programs at the U.S. Tennis Association s Billie Jean King National Tennis Center, notes that high-quality graphite has started to replace Kevlar in many rackets, resulting in less vibration from high-intensity shots. There s also a move toward smaller grips, which allow the wrist to flex and creates more spin. They have really been stretching the boundaries, Kraft says.

The Babolat Aeropro Drive GT the top-selling racket in the U.S. and our top pick is made of graphite and tungsten, and comes in a variety of grip sizes, including the small 4.25-inch grip used by top-ranked tennis pro Rafael Nadal. Currently in its third generation, the Aeropro Drive was the talk of the U.S. Open, says Mark Mason, owner of specialty store Mason s Tennis in New York. The 100-square-inch racket head makes for a large sweet spot and uses so-called Woofer technology, a built-in pulley system that allows the strings to contract at the point of impact and hold the ball for a split second longer. It really gives you more control, and then the ball is trampolined off for more power, says Mason.

Men's Casual Shoes

OUR PICK Salvatore Ferragamo Lew slip-on ($420) RUNNER-UP Rachel Comey Norwich oxford (Suede, $345) BARGAIN Johnston & Murphy Prescott lace-up ($265)

If you've visited a shoe retailer in the past year, you might not be surprised to learn that navigating the racks is becoming more difficult; sales of high-end casual footwear in the first ten months of the year were up 22% compared with 2009, according to marketing-research firm NPD Group. You also might know that the options are enough to confuse all but the most-skilled shoe salesperson. Brown or black? Round-toe or square? Buckle, lace-up or slip-on?

The good news is there aren t any strict dos or don ts in pulling off the casual look, says Nickelson Wooster, men s fashion director at Bergdorf Goodman and Neiman Marcus. People talk about brown versus black, but there s no right answer, he says. Still, buyers should consider a shoe s purpose: Will it be mostly worn outdoors or in? Summertime or year-round? Calfskin and lambskin leather are fine for fair weather, but for anything beyond that, you ll want a heavy, durable cowhide, Wooster says. Generally speaking, round toes and slip-ons help achieve a relaxed look. San Francisco based sales manager Josuf Zobairi says he looks for pairs with understated flair and tries to avoid square toes. In sales, it s all about first impressions, he says.

Stylewise, a derby or loafer can be a sophisticated choice with retro appeal. The Salvatore Ferragamo Lew Slip-On has a polished chestnut-leather finish that is more timeless than trendy. The sturdy rubber heel makes for a durable shoe a selling point for Wooster and though the toe box is slightly angled, the unembellished surface makes it an easy pair for matching with weekend attire.

E-Readers

OUR PICK Apple iPad ($499 to $829) RUNNER-UP Barnes & Noble Nook ($149 to $199) BARGAIN Amazon Kindle ($139 to $379)

These days digital readers aren t just lightweight storage devices for those stacks of their pulp-based predecessor. Some now surf the Web or play video clips embedded on the pages of e-books. But this holiday season, a big question surrounds this burgeoning market: Which gadget is best for bookworms?

Last year nearly 5 million e-readers were sold, according to IMS Research, and sales are expected to more than double in 2010. Yet the new toy in town the tablet combines book-reading tools with computing functions such as e-mail and Web access and has established players like Amazon, Sony and Barnes & Noble scrambling to keep up with the competition. One move was to slash prices by as much as 40 percent, but it may not be enough: Sales of tablets from firms like Apple and Dell, plus a new one from Samsung, are on pace to eclipse e-readers within a year, says James McQuivey, an analyst at Forrester Research.

Which brings us to the industry s big battle: Kindle versus iPad. For fiction fanatics or those who devour a few tomes each month, experts say, Amazon s Kindle best minimizes eye and wrist strain, thanks to its gray, high-contrast screen and light weight (about half a pound). While Apple s iPad is a pound heftier, we think its fast and easy scrolling make it better suited for those who tend to skip chapters or read fewer than two books a month about 80 percent of the population. A Kindle app for the iPad means users aren t limited to Apple s 60,000 titles and can connect to Kindle s 700,000-and-growing library. Its larger, full-color touchscreen also provides a richer experience when enhanced books include videos or pictures. Plus, it just looks slicker. People are watching you read, says Rama Chorpash, director of product design at Parsons the New School for Design in New York. In the end, it s a fashion accessory.

Men's Watches

OUR PICK Frederique Constant Maxime Manufacture Automatic ($2,550) RUNNER-UP Baume & Mercier Classima Executives ($1,490) BARGAIN Xetum Stinson Automatic ($995)

Meehna Goldsmith calls herself a watch matchmaker. She says she can consider things like the way you dress and your favorite music and recommend the perfect watch. But the Los Angeles watch expert also takes into account the market, the latest trends and the times. And these days, practical is in. The downturn has sparked an interest in timepieces with clean faces and classic features. A watch that shows the time and date, she says, makes a simple declaration: I m here to work.

Like the rest of the luxury market, demand for watches was hit hard by the financial crisis. Worldwide exports of Swiss watches, long considered the standard of quality in the industry, tumbled 22 percent in value in 2009, their first decline in five years. Things are looking a lot better these days, though, with the Swiss watch industry reporting a 20 percent sales increase for the first half of this year. Sales of lower-priced watches are doing particularly well. And why not? Now that many watches are constructed with more precise computer technology, the features of self-winding automatic timepieces can be found in less pricey models, says Chris Hooper, a military watch collector based in the Netherlands.

Until recently, desirable dress watches featured intricate complications flashy details in addition to the time display itself. But the current trend is a preference for plainer, simpler designs. Our top pick, the Frederique Constant Maxime Manufacture Automatic, ventures outside the traditional with its circular date indicator and large 42-millimeter dial. Goldsmith says those elements provide an update to the stoic Roman numerals and sunray-patterned white dial.

Eco-Lodges

OUR PICK Lapa Rios Ecolodge, OSA Peninsula, Costa Rica (Doubles start at $540 per night) RUNNER-UP Nihiwatu, Sumba, Indonesia (Doubles start at $505 per night) BARGAIN Morgan's Rock Hacienda & Ecolodge, San Juan del Sur, Nicaragua (Doubles start at $372 per night)

Not so long ago, the very idea of eco-travel was enough to send luxury vacationers cowering under their 800-thread-count sheets. But as green products and services have ballooned into a trillion-dollar industry, earth-friendly vacations have become a travel hot spot. In a survey by TripAdvisor, 33 percent of travelers said they d pay more to stay in a hotel with an environmental certification. Now a growing number of eco-lodges green properties usually located near protected nature areas are reaching out to upscale travelers, swapping cold-water showers and hippie-chic decor for gourmet chefs and elaborate spas.

All the luxe trappings, though, have made it more difficult to sort the true eco-lodges from other resorts that have wrapped themselves in the green flag. To get the real deal, experts suggest looking for properties with eco-friendly buildings, a role in conservation and community development, and programs that help guests experience local nature and culture. Green-travel certifications from nonprofits and other organizations can help, but they can also be inconsistent. Brian Mullis, CEO of nonprofit Sustainable Travel International, recommends seeking out lodges with a stamp of approval that includes on-site inspections.

For many travelers, Costa Rica is synonymous with high-end eco-travel, thanks in part to Lapa Rios Ecolodge, located on a 1,000-acre nature preserve by the Pacific Ocean on the Osa Peninsula. Visitors to the lodge can spend their days spotting local creatures like squirrel monkeys, iguanas and three-toed sloths. They can also head to the water for kayaking and surfing or just relax in the hammock on their private deck. Laid-back luxury, indeed.