Investing lessons learned in 2011

To paraphrase Yogi Berra, it's tough for investors to make predictions, especially about the future.

That was certainly the case in 2011 for investors whose portfolios were hurt by unforeseen developments -- from Libya to Japan to Europe to Washington.

Here are some investing lessons from this year:

IPOs are a gamble: It's wise to avoid a stock that has just gone public unless you're fortunate enough to buy at the offer price (before it hits the open market). This year's initial public offerings showed again that new stocks tend to soar on Day One, buoyed by all those who got in early, and then stall. Several stocks that enjoyed a big first-day "pop" in 2011 are now back below their offering prices. Case in point: Groupon Inc., up 31 percent on Day One; since then, down 13 percent.

Don't count out Treasurys: Did you follow the lead of star bond investor Bill Gross of PIMCO and dump Treasurys because the outlook was bad for U.S. debt? Oops. You lost out on good returns.

Treasury prices rose sharply starting in February as the weaker U.S. economy and Europe's debt crisis sent investors looking for safe investments. Yields on bonds move in the opposite direction from their price. The strong demand for U.S. debt sent the yield on the 10-year Treasury to a record low of 1.71 percent in September. It was 2 percent Friday.

How to explain bonds' unusual staying power for investors? Safety trumps all, says Gary Thayer, chief macro strategist for Wells Fargo Advisors in St. Louis.

"During uncertain times, investors are willing to accept a low rate," he says.

Netflix is not nirvana: Be careful with hot stocks -- you can get burned. Netflix Inc. lost nearly 80 percent of its value the second half of the year. That was after it rose nearly 400 percent in 18 months. It peaked at $304.79 in July before plunging to $62 this month.

International investments can implode: Many investors ignored warning signs about Europe a year ago. That came back to bite anyone who was heavily into European or international stocks. The Vanguard European Stock Index Fund lost 30 percent of its value between April and late September as the sovereign debt crisis boiled over. And international stocks overall, as measured by the Vanguard Total International Stock Index Fund, fell nearly as much during the same period -- 25 percent. Both are down double-digit percentages for the year.

That doesn't mean you should ignore international stocks entirely in your portfolio. "International diversity is important in the long term," says Mark Luschini, chief investment strategist for the Janney Montgomery Scott investment firm in Philadelphia.