For all the angst investors suffered in 2004, it actually turned out to be a pretty good year.

Inflation stayed low. So did consumer interest rates – somewhat surprisingly, given the Federal Reserve’s five stabs at nudging them up.

OK, we’re all unhappy that stocks, which had some wild swings this year, have yet to return to the peaks hit in 2000.

But investments made in the past couple of years have done pretty well. The chief market gauge, the Standard & Poor’s 500 index, has returned more than 10 percent this year, including reinvested dividends.

That’s on top of last year’s nearly 29 percent gain. The index is up about 60 percent from the low in October 2000, after the stock market collapsed.

So what’s the best investment strategy for 2005?

How about doing nothing?

I don’t mean absolutely nothing. But it makes sense to just stick with the program, avoiding the temptation to make radical changes. Keep putting new money into your 401(k) every month, and do the same with any taxable investment accounts.

Unless you’re very old or very young, stick with an asset allocation in the neighborhood of 60 percent stocks, 25 percent bonds and 15 percent cash. Older investors should put more into bonds, younger ones more into stocks.

(Keep the bonds relatively short-term – with maturities of, say, five years or less – as interest rates are likely to rise and undermine bond prices.)

I come to this advice after digesting a flood of 2005 forecasts from academics and Wall Street analysts.

Also, a long-term, buy-and-hold investment strategy with the kind of asset allocation I mentioned has done pretty well over time.

3.6 percent growth

Here’s what the pros generally expect for next year:

The economy should grow about 3.6 percent, compared to the 4.0 to 4.5 percent expected when this year’s numbers are all in.

The core inflation rate is expected to hover around 2.3 percent, slightly below the long-term average around 3 percent.

Earnings for the S&P 500 companies are expected to grow about 10 percent, about half this year’s rate.

Big-company stocks in that index and the Dow Jones industrial average ought to return around 8 percent, while technology stocks, such as those in the Nasdaq Composite Index, should gain 9.0 or 9.5 percent.

Trading of stock options shows that speculators think stocks will be less volatile next year – that price swings won’t be as wide.

Job creation may pick up, but probably just a tad to perhaps 133,000 jobs a month compared to 112,000 in November. Many experts think employers have wrung about as much extra productivity out of workers as they can. So, to produce more, they’ll have to hire.

Oil prices are notoriously hard to predict.

The war in Iraq could affect oil prices.

The dollar’s fall against the euro and yen is also a worrisome factor.

But it also makes foreign investors worry that their holdings in the U.S. stocks and bonds are losing value when currency exchange rates are taken into account.

Americans spend more than they earn, as evidenced by the trade and federal budget deficits. The difference is financed by foreign lenders who buy U.S. Treasury bonds.

Should the dollar continue to fall, the government might have to pay higher interest rates to attract those lenders. That would cause mortgages and other interest rates paid by American consumers to rise.

So it is important that the government tackle those deficits, especially the budget deficit. Professional money managers – the people who determine whether stocks and bonds rise or fall – will be watching to see if the Bush administration is really going to attack the budget deficit, as the president has promised.

I don’t know what’s to come in the new year. But it’s safe to say that overly gloomy predictions are just as likely to be wrong as overly sunny ones. The prudent course is to assume the economy and financial markets will plod along at an average pace.

It’s heartening to see that this is what most of the experts expect.