THIS HAS has been a difficult year - not only because it was hard to predict, but because of the trials and tribulations that have beset world economies and stock markets in general. It started on a high, with many analysts forecasting that a peak would be reached - and soon. The continuation of the bull market into the early summer caught many by surprise. Valuation levels became sorely stretched. Weight of money was, more often than not, cited as the reason for the continuing surge in equity prices. Lower interest rates and inflation seemed to contribute, although the fall in the cost of living in the developed world looked likely to reduce investment returns.

In the end it was the Russian crisis that turned the market on its head. We are having to learn to live with violent market moves these days, and the summer was no exception. The rush to quality created anomalies that appeared bizarre in some instances.

Yield spreads widened to unprecedented levels and, among other things, contributed to the demise of one of the most respected hedge-fund operators in the business - LTCM. The dollar and sovereign debt of the world's most powerful economies benefited, but collateral damage was evident in the way that Brazil and other emerging markets took a pasting.

In the end it was either the shortest bear market on record or a market aberration. By the autumn, prices were marching up again and America even broke into new high ground. But the volatility remained and the disparity between the performance of various sectors served to unseat some managers.

We approach the end of the year with our own economy slowing, little sign of Christmas cheer on the high street, no resolution to the problems in Russia and Brazil, and bombers and cruise missiles once again in the air in the Middle East. It hardly paints a picture of future stability and optimism, but it seems unlikely, however, that equity values are once again poised on the edge of a precipice.

Yet eight years ago, when the coalition forces responded to the invasion of Kuwait, markets took the whole thing in their stride. And it had not been so very long since the stock market crashed, following which intemperate priming of the world's economies had led to the slump of the early Nineties.

Today is different, with the American economy seemingly unstoppable, even if the President of the world's most powerful nation may be approaching his sell-by date. Deflation may be a worry, but by and large prospects really do not look too bad.

Investors learned a lot in 1998. Putting that experience to good use in the year to come will be the trick that many of us will seek to turn in the months ahead.

Forecasts are generally foolhardy, but perhaps we should all now be polishing our crystal balls and endeavouring to second-guess next year's market trends. It might keep me out of mischief as I face the turkey curry next week.

Brian Tora is chairman of the Greig Middleton Investment Strategy Committee