By the time all was said and done in 2009, the S&P 500 had gained 23% as investors dove back into the market on the assumption that recovery was on the way. Giants like Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) more than doubled during the year, while stocks like Sirius XM (NASDAQ:SIRI) and Walter Energy posted incredible gains of 400% and 330%, respectively.

After the furious performance of 2009 we're now one month into the new year, and the market's seesawing thus far suggests that investors are throwing their hands up and saying, "What do I do now?"

To find some sense in the current market, I turned to the investing team at the Motley Fool Hidden Gems newsletter and asked them one simple question: How can investors beat the market in 2010?

Andy Cross, Hidden Gems co-advisor
Our stock-picking approach here at Hidden Gems hasn't changed that much. We're still looking for well-run, profitable, cheap companies that can grow shareholders' returns over time.

With the market up more than 30% over the past year (even higher for small caps), stocks aren't quite the deals they were last year. Still, we're finding bargains out there in some industrials, health care, and even a couple of apparel players such as Under Armour (NYSE:UA).

Looking at this year I want to find companies that can grow revenues much faster than the economy while making incremental improvements in gross and operating margins. A company like PetMed Express comes to mind. The by-phone and online pet pharmacy provider grew its fiscal third-quarter sales by 11% last quarter and improved both gross and operating margins over last year's third quarter. At almost $19 per share the stock has moved up nicely over the last few months so it's not quite as cheap as I would like, but I continue to keep it on my personal watch list.

Jeremy Myers, analyst
Coming out of a crazy market like we experienced over the past year, I think it's more important to have a big-picture game plan rather than be focused too closely on just 2010. According to hedge fund guru Seth Klarman, "The single greatest edge an investor can have is a long-term orientation."

The only way I know to earn superior returns is to buy good companies when they're cheap, hold them until they're not cheap anymore, and then repeat. Of course when the market makes a move like it did last year, "cheap" opportunities have a tendency to disappear pretty quickly.

Do I think the market is currently overvalued? Yep. But that doesn't mean that I have any clue which direction the market is going to move. Nor does it mean that I've given up on trying to find the good opportunities that remain out there.

Recently I've been leaning toward companies that dominate their industry and offer healthy dividends. A perfect example is wholesale food distributor Sysco (NYSE:SYY). These companies generally haven't enjoyed the explosive run-up that many riskier investments have experienced and hopefully the dividends will offer some downside protection if the market reverses course.

Mike Olsen, senior analyst
When thinking about the market right now, I'm trying to be mindful of two things. The first is that the market's current valuation seems to suggest an "all is well" scenario. Many-a-stock are valued as if the heady days of 2007 will make a reprise. That may happen, but I'm of the camp that consumption is likely to remain at least muted as the consumer struggles to right its ship.

In context, that means a few things. Personally, I'm avoiding stocks that are heavily dependent on the consumer. And when I do take that gambit, I'm trying to pay a price reflective of the range of prospective outcomes. Of course, in that sense, not much has changed -- as ever, valuation is paramount.

Here at Hidden Gems, we're interested in the best small-cap companies. But at the right price, a lot of less-interesting companies can become interesting. Likewise, save statistical outliers, many of the best organizations aren't worth paying up for. But some are. That could mean taking a flier on (NASDAQ:CTRP). Or a less-flashy, but seemingly cheap company, like North American Galvanizing.

This year, just as years past, we're looking to find the right mix of both.

Stan Huber, senior analyst
In the early part of this year I'll be looking for technology stocks to assume the leadership position. Technology is the perpetual growth industry and often recovers ahead of most other sectors. While consumers might still be hesitant to buy a new house or a car, those dazzling new smartphones and electronics gadgets are much harder to pass up.

One of my favorites in techland is longtime Hidden Gems recommendation Atheros Communications (NASDAQ:ATHR). It has a broad range of communications products and is benefitting from being in the right place at the right time. As many new devices become IP-enabled, the desire for constant connectivity drives the requirement for a wireless network interface. Atheros has recognized this trend and has the best solution available for many applications.

Other technology names on my radar include network security firm Fortinet and optical networking innovator Infinera.

As we get further into 2010, I'd begin looking at some of the industrial companies that are reliant on capital expenditures from other firms. These companies will lag in recovery simply because they need other companies to get healthy first, but many are currently bargain priced and will pay off handsomely if one focuses on best of breed.

Seth Jayson, Hidden Gems co-advisor
What investors should be doing right now depends a lot on their temperament. Stocks sure don't look cheap in general, so active indexers might want to take a breather.

Investors interested in individual stocks, meanwhile, should pick and choose pretty carefully. Strict value types will have a tougher time these days since stocks have been bid up so far. The 52-week low list -- which ain't as long as it used to be -- is a good place to check for hated stocks that might still be on the cheap side, but these are often hated for good reason.

Investors looking to get into top-notch companies that are posting strong results will, unfortunately, have to pay up. Companies like Guess? and Atheros have long-term potential for outperformance, but it means swallowing hard and paying for that potential right now. I think the best thing to do in these cases is to start out with small positions and add on price weakness down the road.

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Sysco is a Motley Fool Inside Value pick. Google, Under Armour, and Infinera are Motley Fool Rule Breakers selections. Apple is a Motley Fool Stock Advisor recommendation. Atheros Communications, Under Armour, and International are Motley Fool Hidden Gems selections. Sysco is a Motley Fool Income Investor recommendation. The Fool owns shares of Atheros Communications, Under Armour, Infinera, and Sysco. Try any of our Foolish newsletters today, free for 30 days

Fool contributor Matt Koppenheffer owns shares of Sysco, but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool. The Fool's disclosure policy has never once been caught with its pants down. Of course, it doesn't actually wear pants ...