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Yes, it's that time of year again.

As it does every year, this column is dishing up 10 forecasts for the year to come. But first we will return, with a shiver of trepidation, to our forecasts for the year that was.

Indeed, we pathetically missed the mark on a few of them. In fact we were 180 degrees off. But we remain upbeat, as you will see.

This column will be devoted to the 10 forecasts for 2005, and the weekend column will present 10 forecasts for the year 2006.

l The U.S.: "We tend to believe that the system can't last, in which Americans borrow gigantically to raise their standard of living constantly without saving a penny. We fear deterioration of the American hegemony, but are prepared for the possibility that the Americans will surprise in 2005."

That was not a particularly courageous forecast; we qualified it in the last sentence, and indeed, America surprised. It consumes and consumes, savings are in the trough and Santa Claus continues to heap goodies on his subjects this Christmas.

l Interest: "Short-term and long-term U.S. interest rates will continue to rise. If American interest rates jump, the Bank of Israel governor will be forced to start raising rates here too."

Short-term U.S. rates rose 2 percent, long-term interest rates edged up by a tiny 0.16 percent, and as we expected, Israeli rates began to climb fast, rising from 3.9 percent to 4.5 percent in the wake of the American funds rate.

l Dollar: "We wouldn't bet on it. Even if the exchange rate corrects in the near future, there aren't many reasons at home or abroad for the dollar to appreciate."

We had a good excuse: Even Warren Buffett, Bill Gates and most major economic analysts bet against the dollar in 2005, and took a bath. The dollar appreciated in world markets, and here too. It cost Buffett a few billion.

l Foreign investors: "Foreign investors are hungry for returns and international diversification. They will resume investing in the local capital and high-tech markets."

They did, big time. Foreign investors were the great surprise of 2005. Starving for returns, they rampaged throughout the emerging markets and invested some $10 billion here, which was the main driver of gains on the Tel Aviv Stock Exchange.

l Real estate: "The housing market can expect another disappointing year. Contractors are in for a disappointment when their expectations of price hikes are dashed again."

It didn't happen, not in 2005. In some areas prices did show signs of recovering: a 2-5 percent increase in Kiryat Ono and Nes Tziona, up to 10 percent in Tel Aviv, Jerusalem and areas of Herzliya Pituah.

"The year 2005 could be the year in which it transpires that property prices can drop after five years of unprecedented prosperity in the U.S. and England."

Indeed, the mad rise of property prices did grind to a halt and in England, prices retreated for the first time in years. But the rumors that the market was cooling off were premature.

l Banks versus brokers: "In 2005 money will continue to seep massively from the banking system into private bodies," we wrote, and then got specific. We projected that 49 percent of the total amount raised by mutual funds in 2005, or NIS 10.8 billion, would be routed to privately held funds, and only 51 percent or NIS 11.2 billion would go to bank-managed funds.

We also predicted that some of the private brokers who did so well in 2004 would start to flag, as it transpired that their outperformance in previous years had been based on transitory factors. That prediction proved accurate.

l Offerings: "As long as the market is amenable, public companies will continue to raise massive amounts through offerings of stock and bonds, and their shareholders will continue to cash out massively." Right on the money: companies raised more than NIS 20 billion through bonds and NIS 10 billion through stocks, and major shareholders poured billions worth of merchandise onto the market.

l Foreign exposure: "As long as the dollar weakens and stock markets tread water, institutional investors will be afraid to send money abroad. They will focus on the local marketplace but the sheer possibility of investing abroad will lead to the development of new financial instruments in Israel, and will increase the sophistication and demands of local investors."

Institutional investors sent their money abroad faster than we had expected: $2.5 billion in 2005. The year 2005 was definitely the year of smart new investment vehicles, first and foremost the ETFs, or exchange traded funds. Investment in them soared to NIS 10 billion.

l Netanyahu: "Finance Minister Benjamin Netanyahu has geared down the economy in the last year and can't be expected to gear it up in 2005. The only reform he has a chance of completing is the Bachar reform."

Indeed, the Bachar reforms were executed, at incredible speed, but Netanyahu not only geared down, he walked out with execrable timing.

l Internet: "Five years after the bubble burst, the Internet will make a comeback. All the predictions that were making the rounds five or six years ago will come true this year. For the first time in three years we shall see new investments in the Internet."

For that one prediction alone, it was worthwhile to take the risk of producing our predictions parade. And so this Friday we shall do it again, and provide 10 predictions for the year 2006.