Geoff Cutmore is a news presenter on CNBC

Do you remember the paralysis investors felt this time last year? As we rolled into 2009 from the bear hug of 2008, questions were being asked about the survival of the banking system, and the hardest question of all (given their rock bottom valuations) was: ‘When do investors start buying the banks again?’.

It was very easy to loathe them. Buying back into the financial stocks was a challenging prospect. The casualties were only just emerging from the fog of battle. Lehman’s disappeared, Merrill’s was gobbled up by Banc of America, and in the UK, HBOS was consumed by Lloyds and RBS put on life support. Nearly all banks had dabbled with exposure to US mortgage debt or some other type of leveraged pyrotechnics and to a greater or lesser extent been punished for it.

And yet... The biggest banks had not been allowed to fail, instead they were bailed out with public money and Central Banks engineered policies to allow them to generate terrific profits. The good money managers got into the trade early. The rest spent the year catching up as the bank led rally drove the FTSE to 30% plus gains.

So what about this year?

The weakening dollar has been a key part of this market recovery becoming everybody’s favourite funding currency. But what happens when the dollar weakness reverses?

We know the economic backdrop is still tough. Industrial production has been subdued, unemployment has continued to rise and none of this has mattered in the face of a liquidity driven rise in the value of nearly all asset classes. Stimulus packages and inventory rebuild have driven a recovery in some countries, Japan and Chi­na have seen industrial ac­tivity spike 22% and 55% respectively, and there is a lot of money backing the notion of a V shaped recovery this year.

So, we will all have to watch the vital signs closely. Can the stimulus led re­covery morph into a sustainable growth phase? Will com­panies stop cutting and start investing in growth? Can the monetary/reflationary fiscal policy evolve into stronger corporate earnings?

In this ’goldilocks’ rebound for markets the key has been that the real economy recovery has neither been ’too hot or too cold’. The weakness of the global reserve currency has eased pressure on a world that has borrowed too many dollars. Near zero US interest rates have allowed over borrowed consumers to refinance their debt.

But markets may enjoy less strength this year precisely because the recovery is beginning to take hold and markets are pricing in a higher cost of money and a firmer dollar. Any whiff of a change in direction for the greenback could see a rush to exit this rally in stocks and commodities. So the key to making money this year will be in forecasting just when that turn comes, or at least staying focused enough on the story to squeeze out of positions before the crush for the exit starts.

Geoff Cutmore is a news presenter on CNBC