Let's not be deluded, 2010 is going to be a tough year for us all

But markets can also be examples of blinding self-delusion, when investors cling stubbornly to their belief in a particular stock when all the evidence brilliantly illuminates the exit sign in three dimensional terms.

What, then, are the investment prospects for this year?

Addressing the UK's economic chaos has to be the key. What we need is political courage and strategic policies; what we have is perhaps six months of political manoeuvring. I wonder why anyone would wish to be prime minister. Our economic challenges make the Labours of Hercules look less demanding.

Consider the numbers. The UK is on track for a budget deficit of around 180 billion, with the economy shrinking by perhaps nearly 5 per cent.

Public sector borrowing is about 12.5 per cent of GDP, squeezing out credit markets, weighing down private corporate initiatives and terrifying the currency market. After 13 years of New Labour rule, over a fifth of the working population is employed by the state, an obesity which must be addressed.

The Conservatives are trying to avoid being boxed into confirmed policy proposals and, consequently, are being successfully accused of threatening a regime of unqualified austerity.

Politically, the Tories, with a working majority, might have the power to address this country's yawning financial imbalances but they will face the re-empowered Unite and Unison unions, who have gained battle experience in minor skirmishes with the managers of the Post Office and British Airways.

Whichever party prevails at the polls will have to rustle up a budget in fairly short order. Labour's problem is that it also has to produce a financial statement in March, as Gordon Brown appears to have ruled out the possibility of a general election before the new financial year.

Would a hung parliament be such a disaster? For individual political prospects it probably would. Forming a National Government in 1931 infuriated the Labour Party which he helped to create, and from which James Ramsay Macdonald was expelled. Before Brown and Cameron attempt to drag Liberal Democrat leader Nick Clegg up the political aisle they should reflect upon the consequences of cross-party alliances on their own rank and file.

Vince Cable may be an affable and, indeed, able economist but I am not convinced that his references to the economic challenges by which we are faced are much more than a posturing plaster for a severed financial artery.

Assuming Cameron does prevail, the Conservatives will have to take difficult decisions quickly, as they are likely to be ultimately unpopular. A clever trick would be to cut public sector spending by more efficient management of budgets whilst stimulating the private sector to take up the slack with imaginative fiscal stimulus.

I fear though, as always, that politicians will prefer to throttle the golden goose rather than try to increase her production.

For smaller, and family run businesses – the backbone of this country's industrial future – the next 12 months look bleak indeed. For individuals, it is essential that all legal tax havens be investigated, including individual savings accounts and pensions.

The Arctic chill blowing through this country at present is likely to be replaced into the early summer by just as cold an economic environment.

Sticking out my well scarred neck, I am reasonably hopeful that investment markets will be looking more optimistic in twelve months time under the urgencies of the more dynamics regions of the world, but it is far from certain that the UK stockmarket will rise from its current level very swiftly.

Bryan Johnston is a senior divisional director with Brewin Dolphin.