5 Reasons to Go Short in 2010

#1 A Return to Fundamentals

The new year is starting the way last year ended, with a return to fundamentals. The rally we experienced in 2009 was largely technical in nature, and it drove virtually all stocks — good and bad — higher. However, toward the end of 2009, investors began to pay more attention to fundamentals, and this trend will continue in 2010.

As investors put the irrational exuberance of 2009 behind them and focus on the fundamentals of companies and market segments, you will see a divergence between the “good” stocks and the “bad” stocks. And the fundamentally unsound companies will make excellent shorting candidates in 2010.

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