Looking back at a previous year and identifying the stocks and industries that have performed the best is an easy exercise. Looking forward is much more challenging but, until a real crystal ball is invented, that is the only current way to invest. Retired boxer Mike Tyson may have put it best by pointing out that the past is history and future is a mystery. With that, below is a prediction on five industries that could post high returns during the year. (SEC forms can be a real headache. Find out how to make your research more efficient and more effective. Check out Speed Read SEC Filings For Hot Stock Picks.)

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Healthcare
Debate over the implementation of recent healthcare legislation will continue with heated animosity, but the fact remains that an estimated 30 million new individuals will be entering the industry over the next few years in the United States. This means more spending on pharmaceuticals, medical devices including stents and joint replacements, and lab tests.

The argument in the United States will be over whether this type of growth is sustainable. Currently, the United States is far ahead of the rest of the world as healthcare spending represents more than 16% of GDP. Overall though, an aging population in the United States and throughout the world suggests there is considerable upside to healthcare spending over the long haul, and low valuations mean much of this potential isn't yet reflected in the share prices of many industry leaders, including Medtronic, Merck and Johnson & Johnson.

Media
Upside in the media industry stems from the potential for advertising to rebound along with the economy. Spending on ads is usually one of the first expenses that companies look to cut in a downturn and it can take time for the spending to return, but it should this year and over the next couple of years as the economy continues to recover.

Additionally, many industry players are finding ways to succeed as media continues to evolve in the digital age. The biggest beneficiary is perhaps Netflix, which started as a mail-order movie rental company but has morphed into streaming films over the internet. It just hit 20 million subscribers. DirectTV is also succeeding in providing subscriptions to watch NFL games and movies at the same time they become available for sale on DVD. Online ad spending continues to take off regardless of the economic climate, with Google leading the way. (Here we explore why the media focuses on certain earnings manipulation cases in post-Enron Wall Street. Check out A Case Study: Earnings Manipulation And The Role Of The Media.)

Technology
The digital age is also benefiting the technology industry. Cisco is a leading firm that sells equipment such as routers and switches that pipe data throughout cyberspace. The need to gather and interpret data is also becoming increasingly important and means firms that operate in the information technology industry, including Accenture and Infosys, should continue to grow rapidly.

As with healthcare, valuations for leading firms in the tech industry are still reasonable. This means the coming year could see a good combination of fundamental growth and valuation expansion for many of the underlying stocks in the space.

Financial
Financial firms that survived the credit crisis should continue to recover in 2011. Large banks, including JPMorgan Chase and US Bancorp, are already seeing profits return to pre-crisis levels while insurance companies such as Travelers and Allstate are also seeing improving fortunes as their investment portfolios return to normal and higher bond yields help boost investment income.

Lower default and delinquency rates should also help those that offer credit cards and mortgage loans. Uncertainty still exists over how tighter regulations will affect the industry, but a dovish Federal Reserve that is focused on feeding liquidity into the U.S. economy should keep interest rates low and encourage financial activity, such as lending and subsequent investment by firms in other industries.

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Retail
Like media, retail is playing on economic upside. The recent downturn proved just how discretionary spending can be for goods such as apparel and other fashion-based items. Wal-Mart did relatively well during the downturn as consumers became very cost-conscious and focused on buying more basic necessities such as food and core household items. But consumer sentiment is improving and shoppers are returning to more upscale retailers such as Tiffany, Nordstrom and Target, the last of which tries to strike a better balance between cost and fashion.

The Bottom Line
It won't be until 2012 that the mystery is unfolded as to which industries were the best performers in 2011. Other contenders include energy, defense and property, but were left out over concerns about overheated commodity prices, spending cutbacks and continued malaise in residential and commercial property markets, respectively. (Predicting sales growth can be something of a black art - unless you ask the right questions. See Great Expectations: Forecasting Sales Growth.)

Disclosure: At the time of writing Ryan C. Fuhrmann was long shares of Cisco but did not own shares in any other company mentioned in this article.

For the latest financial news, check out Water Cooler Finance: Anti-Government Protesters Rock Egypt.

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