Welcome to 2011: 'Old' risks are back!

Stocks enjoyed a nice start to 2011 but tanked during the spring and summer on economic fears. Will it be deja vu all over again this year?

NEW YORK (CNNMoney) -- May begins next week. Or, as I like to call it, the 17th month of 2011.

Sure, the calendar may say 2012. But with economic growth in the United States remaining painfully slow, Europe's debt crisis still at a boiling point and fears of a slowdown in China not going away, it's beginning to look eerily like last year.

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Stocks had a hot start in 2011 on economic rebound hopes -- although the rally wasn't as strong or long as the beginning of this year. The market then cooled dramatically during the spring and summer as macroeconomic fears once again took hold. Stocks wound up finishing a very volatile year relatively flat.

That could happen again this year. The bulls might soon go into hibernation (or the Hamptons) for the summer if that old axiom about selling in May and going away holds true. And could you blame investors if they look to take a break (and some profits) with the S&P 500 up nearly 12% already this year?

"Some of the concerns that affected the market last year are bubbling up again. Good news tends to be followed by bad news," said Jeff Coons, director of research and president at Manning & Napier in Rochester, N.Y. "The markets want short-term solutions to what are inherently long-term problems to overcome."

It's unlikely the market can continue rising at such a clip for the rest of the year because the economic and earnings growth just simply won't justify it.

Many market strategists and economists said investors have to get used to a prolonged period of low and slow growth in the U.S., something I've been calling the BBQ recovery for nearly two years.

"Economic conditions in the U.S. are improving, but it will be bumpy. It's not an uninterrupted upward trajectory," said Frances Hudson, global thematic strategist with Standard Life Investments in Edinburgh, Scotland.

Hudson seems to share the sentiments of Bill Gross and Mohamed El-Erian at bond investing powerhouse PIMCO. The world needs to adjust to an era of subpar returns for investments and less-than-desirable growth. A "new normal" if you will. The "good old days" were fueled by a corporate, consumer and sovereign binge on debt.

"There is not going to be growth anything like the past few decades since so much of that was built on leverage and securitization. It seems to be taking a while for that new reality to set in," Hudson said.

Hudson added that a particularly troubling sign for the markets is that the days when stocks go up tend to be accompanied by low volume, while sell-offs usually happen on heavier volume.

That may be a sign that both average investors and big institutions alike are skeptical of how much longer this year's rally can last. They are more eager to get out of stocks than rush back in.

So even though investors have been celebrating a relative absence of stomach-churning one-day stock drops this year, there is still a lingering stench of fear. Investors have to be prepared for more disappointments and jitters, particularly regarding international markets.

"The troubles in Europe will be with us for a while. Japan could blow up. People are still worried about China," said Thomas Kirchner, manager of the Quaker Event Arbitrage Fund (QEAAX) in Malvern, Pa. "Macro risks are going to prop up and depress the market every now and then."

Still, it's not all bad news. The fact that stocks were not tanking Friday after the lower-than-expected GDP number is encouraging. It shows that investors may be slowly coming to terms with the fact that growth won't be robust. But it's clear that a sluggish economy will hold back stocks a bit for the rest of the year.

"We've expected modest economic growth in 2012," said Kate Warne, chief investment strategist with Edward Jones in St. Louis. "That should be enough to allow stocks to move a little higher but it won't be at the same pace as the first quarter. And there will be more volatility."

Warne added that it was good to see that consumer spending rose as much as it did -- 2.9% -- in the first quarter. So even though the economy is limping along, that has more to do with the government pulling back. Consumers -- so far -- are still doing their part.

And Coons said long-term investors should be able to find solid stocks that can grow even in challenging economic environments. He said leaders in technology, health care and agriculture, should do well because of strong long-term fundamentals.

Along those lines, Coons said that his firm owns stakes in Google (GOOG, Fortune 500) and Qualcomm (QCOM, Fortune 500), two stocks that should continue to benefit from robust demand for mobile devices. He also likes medical records technology company Cerner (CERN) and seed developers Monsanto (MON, Fortune 500) and Syngenta (SYT).

Coons added that investors may be continuing to fret about big picture global issues now. But eventually, he thinks the market will succumb to "macroeconomic fatigue" and realize that even if growth slows, it is highly unlikely to be a repeat of the dark days of 2008 and 2009 again.

Even the dreaded R-word, which British consumers are once again faced with, might not be that awful.

"If the U.S. falls into a recession now, it would be like falling off a curb. In 2007 and 2008, we fell off a three-story house with too many bedrooms and too much mortgage debt," Coons said. "There's just not that much downside."

Best of StockTwits and reader comments of the week: Amazon (AMZN, Fortune 500) shows that Tablet Town may be big enough for two sheriffs. But that doesn't make the online retailer's surging stock cheap.

retail_guru: Amazon was $3BN US biz in 2004. Now a $28BN biz in US and growing 2X as fast as it did in 2004. Made irrelevant by $AAPL? 'nuff said $AMZN

I agree that Amazon is amazing. Apple is clearly not making a dent in sales. And as I point out in today's Buzz video, it looks like good times for Amazon and fellow Washington State native Expedia (EXPE), which also reported solid earnings. Viva 1999. However, about that stock price ...

Ktr8der: I'll never understand $AMZN earns less than $1 a year, and sells at 140X Imagine if $AAPL were awarded this premium. no amzn pos

firstadopter: Stock market is a funny game sometimes. $AMZN operating income -40% y/y, but huge rally b/ c it beat lowered expectations. Sigh

I would prefer Apple (AAPL, Fortune 500) over Amazon because Apple is cheaper, has more cash and higher profit margins. Amazon is a great company that deserves a lot of praise. But it's too pricey at this point.

Apple's huge earnings beat was the market story of the week. So I had to devote at least one of the top reader comments to it. It's from money manager (and participant in CNNMoney's recent investing video roundtable) Lee Munson. He seems to sum up best the mixed emotions many have toward Apple's shares and products.

"the one stock I own I really hate. Tweeted from my iPhone," he quipped.

The second winner gets a shout-out because he followed-up one of my "Godfather Part II" references with one of his own. After U.S. Steel (X, Fortune 500) reported earnings this week, I joked about how it was Hyman Roth's favorite company. ("Michael, we're bigger than U.S. Steel.") Mark Nelson chimed in with a nod to another scene from the Cuba section of the film.

"I'm taking profits and buying a solid gold telephone," he tweeted.

Nice. Just remember to be careful any time you are getting off a plane in Miami!

Anyway. long weekend awaits. No Buzz Monday. Back on Tuesday ... assuming I haven't sold and gone away of course.

The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.