The past year was a volatile one for stocks but investors overall were rewarded at the end with solid gains.
That was in sharp contrast to 2011, when they suffered volatility only to end the year pretty much where they had started.
For 2012, the broad-based S&P 500 Index was up 13.4 percent, the technology-focused Nasdaq Composite gained 15.9 percent and the blue chip Dow Jones industrial average was up 7.3 percent, according to Bloomberg News.
Bay Area stocks outperformed the national stock markets, with the Bloomberg Bay Area Index of the 380 public companies in the nine-county region posting a 16.2 percent gain during the year.
But some investment experts in the Bay Area said at least part of the uptick in the stock markets isn't based on solid fundamentals.
"The returns are good but they have been created by some level of manipulation," said Jeffrey Elfont, president of Walnut Creek-based Pinnacle Capital Management. "We have been seeing printing of money by the Fed, they have been buying Treasury notes, and they are buying home mortgage bonds."
The just-concluded trading year continued a pattern of sharp swings in the nation's stock markets.
"There is a lot more volatility in the stock market now than there used to be," said John Valentine, president of San Ramon-based Valentine Capital Management. "You had Y2K, 9/11, the massive sell-offs in 2008 and the market bottom in 2009. Investors are going to have to learn how to accept volatility and use it to their advantage."
One approach investors should take is a long-term view of the stock markets, he and other experts said.
"There is always something going on," said Libby Mihalka, president of Livermore-based Altamont Wealth Management. "There is definitely more volatility built into the markets. There is always another fiscal cliff, another debt ceiling, that people will have to deal with."
So what does 2013 hold? In Elfont's view, it won't be a very pleasant year for stock market investors.
"I think 2013 will be as flat as a board," Elfont said. "There will be a lot of volatility all year. But when you see how it all ends up, the stock markets will be just about right where they started the year."
But other financial professionals think the stock markets could hop higher during 2013 if the nation's leaders can resolve the fiscal cliff issues, and if the economy strengthens in the coming months.
Although investment experts advise people to remain in the stock markets, they also concede that the typical investors have begun to lose their appetite for Wall Street's roller coaster.
"I do see that people have lost confidence in the stock markets," Mihalka said. "They have lost confidence in the politicians and Wall Street."
Contact George Avalos at 408-373-3556 or 925-977-8477. Follow him at Twitter.com/george_avalos.
These are the Bay Area companies whose stocks performed the best during 2012. The chart lists the company, its headquarters, and the percent change for the year.
1. Pharmacyclics, Sunnyvale, +289.9 percent
2. Sunesis Pharmaceuticals, South San Francisco, +259.0 percent
3. Threshold Pharmaceuticals, South San Francisco, +245.1 percent
4. 8x8, Sunnyvale, +132.8 percent
5. Selectica, San Jose, +124.9 percent
6. Ikanos Communications, Fremont, +100.0 percent
7. StemCells, Palo Alto, +97.8 percent
8. ZipRealty, Emeryville, +154.5 percent
9. Medivation, San Francisco, +121.9 percent
10. Sangamo Biosciences, Richmond, +111.6 percent
bay area losers
These are the Bay Area companies whose stocks performed the worst during 2012. The chart lists the company, its headquarters, and the percent change for the year.
1. Telik, Palo Alto, -77.9 percent
2. Corcept Therapeutics, Menlo Park, -58.2 percent
3. Anthera Pharmaceuticals, Hayward, -89.9 percent
4. Zynga, San Francisco, -74.9 percent
5. GeoPetro Resources, San Francisco, -69.6 percent
6. Digital Power, Fremont, -62.4 percent
7. Zeltiq Aesthetics, Pleasanton, -59.2 percent
8. Codexis, Redwood City, -58.3 percent
9. Diamond Foods, San Francisco, -57.6 percent
10. Advanced Micro Devices, Sunnyvale, -55.6 percent
bay areA's largest
Here is how the stocks of the 10 largest companies in the Bay Area, ranked by revenue, performed 2012. The chart lists the company, its headquarters, and the percent change for the year.
Chevron, San Ramon +1.6 percent
Apple, Cupertino, +31.4 percent
McKesson, San Francisco, +24.5 percent
Hewlett-Packard, Palo Alto, -44.4 percent
Wells Fargo, San Francisco, +24.5 percent
Intel, Santa Clara, -15.0 percent
Google, Mountain View, +9.5 percent
Cisco Systems, San Jose, +8.7 percent
Safeway, Pleasanton, -14.0 percent
Oracle, Redwood City, +29.9 percent